Author: Jennifer Koch

It’s a wonder you don’t see buildings actually spinning on their foundations with all the whirlwinds of corporate change buzzing through them lately. Instead, they remain undaunted while human resources professionals, the designated change agents at most organizations, take the brunt of the gusts, enough to make their heads spin.

Indeed, Personnel Journal’s latest survey of the nation’s top HR professionals at America’s Fortune 100 companies found that their number one concern is managing change. In fact, change management has topped HR leaders’ priority lists two years in a row (1994 and 1995). So, if corporate change-and how to manage it-is your toughest HR challenge, you’re in good company.

As the New York City-based American Management Association (AMA) describes it, change management is the developing discipline of planning, organizing and controlling organizational change to better solve present and future business problems. In the AMA’s latest (1994) survey on this topic, in association with the change management team from the accounting firm of Deloitte and Touche LLP based in Wilton, Connecticut, 84% of 259 executives polled said they have at least one change initiative going on at their organizations. Nearly half of them said they have three or more change initiatives under way, including such business agendas as growth (39%), productivity (30%), competition (27%) and globalization.

Ironically, only 68% of the executives reported that their companies have established any sort of formal change management program to support these initiatives. That leaves 32% of organizations flying by the seat of their pants when it comes to leading their people through rapidly changing business climates.

While it may be a cliche to say that if you fail to plan, you can pretty much plan to fail, you may do well to heed the advice of change management experts who say you can’t afford to forget the obvious in any change effort. They warn: Don’t rely on your employees and management staff to simply fall in line with every new business plan you send their way. Chances are, they won’t.

According to Price Pritchett, a change management expert at Dallas-based Pritchett & Associates Inc., the most important rule to keep in mind when you’re facing a change effort is the 20-50-30 rule: That approximately 20% of the people in the organization will be change friendly; the next 50% will sit on the fence; and the remaining 30% will resist, or even deliberately try to make it fail. That means you have a heavy burden-because only 20% of the people will be with you from the start-so you must pull the other 80% of the organization toward your company’s new goals.

Because change is perhaps the most important topic right now on HR’s agenda, we assembled a panel of experts-both management gurus and HR leaders who’ve recently stared down the eye of the change storm and won-to give you insight into what to think about and what to do when change is in the wind.

Walter M. Oliver:
Yes, I’m responsible for being the change agent at Ameritech. However, other executives also share in this charge. In fact, all of our business leaders and employees must take an active role in harnessing the power of change on behalf of our customers and shareowners.

Kelly Ritchie:
As the leader in human resources, I’m responsible for change leadership. However, I view this as a partnership between everyone in HR and our employees. We all must continually look for ways to improve our organization to meet the needs of our everchanging workplace. For example, we’ve added new programs or enhanced existing ones based on ideas from employees. These include the addition of an employee assistance program, adoption assistance and a work/life committee. So, even though I’m definitely responsible as the leader, I really view this as a partnership. And I think by partnering, and by really having a strong focus on making the company an even better place to work, I believe it’ll help our business grow. We’ll support our employees, and we’ll meet the needs of our customers.

Martha J. Watson:
I’m one of many change agents in my organization. I’m responsible, though, for helping all the other change agents (managers and supervisors) implement desired changes. I’m also responsible for helping top management identify needed changes in the overall organization. Yes, it’s my choice, but it’s also my choice by default because I’m the HR director. It has to do with the changing role of human resources management.

Coleman H. Peterson:
Yes. We’re all challenged to be change agents; however, the role of human resources places one in the “natural stream of change.”

Walter M. Oliver:
The toughest challenge is to get the entire organization engaged in this process. That challenge is coupled with the need to make sure that each individual understands his or her role in making change effective. It’s absolutely critical that everyone moves toward a certain level of involvement and engagement in the change process. Otherwise, a wide divergence of focus concerning the reasons for the change can slow or derail the entire process.

Kelly Ritchie:
One of our main challenges is to help everyone in the organization understand that it’s not fully an HR responsibility to lead this change, but rather, it’s the responsibility of all the stakeholders-employees, managers, senior managers and human resources. All areas must work together in building flexibility to help continue supporting our employees’ needs and position the business for future growth. And what I mean by that is, it’s not just HR’s responsibility for performance reviews or development of people or any of those categories, but rather it’s all of us working together.

Martha J. Watson:
Most of us in HR leadership roles today weren’t trained for this kind of [change management] work. We’re having to learn it as we go. I suppose that’s good for us because it mirrors what we say is going to happen to most people in the coming years: We’ll all continually have to learn new jobs. It’s also difficult because in many organizations, HR isn’t seen as adding value to the business. You have to get over that hurdle before you can be an effective change agent.

Coleman H. Peterson:
In a strong culture, change can sometimes look like the enemy of what already has been accomplished. It’s important to understand that the change process is holding on to the successful elements of the present culture and adding new elements that are important to propelling that culture into the future.

What three tools do HR leaders need to help lead their organizations through any change effort?

Walter M. Oliver:
The three tools an HR leader needs are-1) A thorough knowledge and understanding of the change process, 2) Courage and 3) A positive personal self-image that encourages continual learning and growth.

Kelly Ritchie:
The first thing you need is a strong employee focus. Then, you must be grounded in values. We’re grounded in our company’s values-the principles of doing business and the culture that we’ve all created here. We use those as the cornerstones. Then, the third tool is continuous improvement-being innovative with ideas focused on improving the quality of work life.

Martha J. Watson:
The three tools you can’t live without in managing change are: flexibility/adaptability, knowledge of the business and highly developed human relations skills.

Coleman H. Peterson:
Vision, patience and passion.

I think that HR professionals need to be listening posts. They must learn how to listen empathically. Use this analogy. When you have air, you don’t think about it at all. But if you were to take the air out of the room that you’re in right now, you’d be running to get air. The unmet need motivates. So, when you listen to people empathically from that frame of reference, emotionally it’s so affirming and validating to them, they cease being defensive. And negative energy is dissipated.

HR people are in tough positions because they’re often in the crossfire between all of the forces of change and all of the forces within the culture that resist change. If they can learn to listen empathically and not take it personally-not agree, not disagree, just understand-they’ll find these negative energies disappear and get converted into positive energies. People then start to become more a part of the solution rather than part of the problem.

Walter M. Oliver:
The way to harness the energy of employees is to keep them focused on external, customer issues instead of issues with one another. People must have a clear understanding of the reasons for change. At Ameritech, external issues focused the need for change-the competitive marketplace and the regulatory climate were radically altering our business environment. Customers were at the crux of those changes. Senior executives worked to get in front of those challenges. So by revamping our culture, structure, processes, procedures and environment, we changed from a stodgy, bureaucratic monopoly into a nimble, competitive corporation focused on our customers’ needs. It wasn’t easy, but it was necessary and successful.

Kelly Ritchie:
I think all of our efforts in HR are built on trust from employees and managers that we’re sincerely interested in making improvements that add to the quality of Lands’ End. I think we try really hard to listen and then try to respond to those issues, so people feel like positive change is occurring as a result of their ideas. It’s built on trust. It’s built on people actually seeing us take action based on what they’re telling us. If you establish that trust, people are more willing to come forward with ideas and thoughts about what we could do to make it an even better place to work.

Martha J. Watson:
I think you have to give employees a clear and consistent direction and the flexibility to get there any way that makes the most sense to them. Reward the risktakers and support those for whom change is much harder. If you have unions, get them on board, too. That will help a lot.

Stephen R. Covey:
I think the missing ingredient with all of these new initiatives taking place inside corporations-such as the quality initiatives, empowerment, reengineering and outsourcing-is what I call 360-degree trust. That means trust, not only with your customers, but also with your suppliers, your people, the community, your dealers, your owners, the media-with all who have a stake in the welfare and success of your operation. This takes an ecological kind of thinking. You have to see the very delicate balance of how you achieve this kind of trust with all of these different stakeholders. If you only build trust toward customers, for example, and you violate your own people, you’ll gradually kill the goose that lays the golden egg. If you neglect the community, the environment, the next generation, and if you don’t have a sense of social responsibility, eventually you’ll kill the goose that lays the golden egg. They’re all interrelated.

So it takes an HR professional who encourages the executive decision makers to take the long view and to take a balanced ecological view toward all these stakeholders. Then they’ll find that they build trust which comes primarily from trustworthiness. That comes from our own integrity and living by our commitments and also from philosophically aligned structures and systems. You must work to align your work systems, your information systems, and so forth, with the values of cooperation, interdependency and 360-degree trust toward all stakeholders. And that’s the source of trust-it’s trustworthiness at both the personal level and the organizational level. HR professionals can become real catalysts in creating this understanding, this paradigm and this focus in executive, strategic decision making.

Robert Levering:
Trust is the most important ingredient in any corporate change process. Without it, management may find itself constantly fighting rear-guard skirmishes with employees instead of leading everyone forward with confidence toward the future. I believe trust is composed of three elements: credibility, respect and fairness. An example? Several years ago, Northwestern Mutual Life (one of the firms profiled in “The 100 Best Companies to Work for in America”) embarked on a major change effort to improve service quality and productivity. But it did so in such a way that it was able to maintain a high level of trust in the organization. First, the CEO called everyone together and assured them that no one would lose his or her job as a result of the process. Next, the company engaged clerical workers in task forces to redesign their jobs. To make a long story short, major change was accomplished (in one department, 60 job classifications were reduced to six) and that achieved the company’s objectives. Both productivity and service-delivery quality improved markedly.

At nearly the same time, another midwestern insurance company went through a similar change process that, on paper, resulted in a comparable redesign of job classifications. But the firm didn’t involve the employees in the redesign process. Worse, from the standpoint of trust, the firm did nothing to reassure workers that they wouldn’t lose their jobs because of the change. (In fact, a number were laid off.) The result: No change in productivity, morale plummeted and the company even had to fight off a unionizing drive among clerical workers.

Joan E. Farrell:
I think that a clear, unwavering vision of the future is an absolute necessity in a sustained change effort. This vision must then be backed up by a sound business strategy, strong values and an unblinking leadership team. Change is a war zone, and trust alone is powerless. Lead, communicate, train, trust, and people will do all they can.

Stephen R. Covey:
I’d like to focus on the image of a ship’s trim tab. A trim tab [is the device that] turns and directs the rudder, which in turn, steers the ship. That’s a tremendous image for human resources professionals. They should see themselves as trim tabs. Rather than getting seduced by their cultures and feeling unappreciated and undervalued, which oftentimes HR professionals do, they should be the catalysts, the smaller rudders that move the big rudder, that moves the entire ship. How? They need to be more loyal to principles than they are to their company. That’s the best way to serve the company.

For instance, what if you went to a doctor to get a physical, but the doctor was more interested in impressing you and in telling you what you’d like to hear than in telling you the truth? You wouldn’t feel well served. You want to hear the reality and that takes courage. I’ve worked with thousands of human resources professionals, and many times they feel undervalued, unappreciated and gradually become, in a sense, part of the culture. They get sucked into the culture and feel they have to be accepted; they have to keep their job and they kind of sell out. They use esoteric, professional language to badmouth their top executives. And they often take sides in the crossfire. They become the master and victim of doubletalk. I see them, little by little, losing their influence.

The way to enlarge your circle of influence is to get centered first on principles that are larger than any organization and that ultimately control life, such as honesty, integrity, courage, service, continued professional growth and 360-degree trust. If you get focused on those principles and you’re courageous, but also empathic, you’ll become a force that’s formidable. And decision makers will have to contend with you. It may take a few months, even a few years, but HR professionals will become a key force in their companies-a true trim tab person. And executives won’t make major decisions without their involvement. Where do they get the courage to be principle-centered, courageous and professional? They have to make sure that their own professional development is ongoing and that they’re at the cutting edge of all that’s happening.

Robert Levering:
Trust must be earned over time, but it can be destroyed overnight. It requires constant attention. Trust is earned by management showing good faith-by being open, by being respectful of the individual and by being consistent. That’s done both through the company’s policies and practices and by the way in which individual managers implement those policies and practices. HR professionals can play a big role in the process of building trust by encouraging more trustworthy behavior on the part of managers and by assuring that appropriate policies and practices are in place. There is no “Trust Cookbook” with a ready-made list of recipes of trust-building policies.

This much I’ve learned from years of researching the best workplaces in America: What distinguishes the very best workplaces is the way in which policies are designed, implemented and supported. All of this occurs in an atmosphere of trust which means that management is open and accessible, shows genuine appreciation for the work done by employees and has a high degree of integrity. The best human resources professionals I’ve met over the years understand that ultimately what’s important is the nature of the management-employee relationship, not the details of the policies themselves. The very best policies in the world make no difference if they aren’t well integrated with all other aspects of the company’s relationship with employees.

Walter M. Oliver:
Trust is developed through an openness of information, free flow of knowledge, clear direction, consistently communicated progress and finally, thorough knowledge about the process of change and results.

Walter M. Oliver:
First, we have demonstrated consistent and proven accuracy in our strategic decisions. Second, we work very hard to keep people informed about the direction the corporation is taking. Our chairman regularly communicates with employees via e-mail on important issues to the company. Furthermore, he personally answers the responses he receives from employees. And third, we work to be consistent in communicating the vision of the company as we continually make progress on this journey. Change is a journey, not a destination.

Kelly Ritchie:
I think implementing new programs or enhancing existing programs that initiated from one of our employee’s ideas is the strongest sign of building trust. It demonstrates that we truly are listening and we’re trying to improve whenever and wherever we can. It’s also building on the partnerships that we’ve created so people feel comfortable to let us know what they’d like to see. In one of our areas, someone had the idea of a shift giveaway (workers can give a shift away if they can’t work it.) We piloted the program and have rolled it out in many areas. If people feel their ideas have been heard, and in some cases, those ideas have turned into enhancements, they’re much more willing to keep that open dialogue.

Joan E. Farrell:
We said what we would do, did what we said, hung on through adversity, never blinked and were prepared to lose our jobs before we sacrificed our vision and the peoples’ effort in working toward it. On a personal basis, you become what I call the “organizational oiler” working behind the scenes to listen to squeaky wheels, slipping drive belts, worn gears and faltering engines and rolling up your sleeves to get things going again without any fuss, muss or bother. You suggest solutions, people try them and they work. And you never betray a confidence.

Coleman H. Peterson:
Listening. We work hard at listening to our associates. Listening establishes trust and a confidence on the part of the associates that their servant leaders want to do the right thing.

Walter M. Oliver:
The management of stress on the HR organization is best accomplished by sharing the challenges. It’s important to keep the balance of responsibility on the people involved in the change-managers and employees. Avoid loading the charge on any one function. And work to foster independence among employees for this process. A dependence on HR can become self-defeating. Instead, use the revamping of the organization as an opportunity to accelerate growth and learning for everyone involved, from the chairman down to entry-level employees.

Joan E. Farrell:
Because there’s no end of the tunnel, there’s no light at the end of the tunnel. So we make our tunnel as comfortable as possible and keep on rolling.

Martha Watson:
We do lots of fun things and provide lots of training opportunities. We help people see the future and help them see themselves as having a role in that future.

Coleman H. Peterson:
This is a challenge! It’s important to remember that our HR associates are only human and are experiencing the same anxieties and pressures of the rest of our organization. Therefore, it’s important to keep them well educated on the “whys” of their activities. Then we must keep them focused on the “hows.” We must celebrate and appreciate their work and help them understand how key they are to the change process.

Walter M. Oliver:
The nonalignment of HR issues with the change process inevitably slows momentum and creates frustration among employees. A greater threat to the change process is that this nonalignment can divert the focus and attention of the organization away from key business objectives and toward ancillary human resources issues. This can waste precious time and resources that would be better used addressing the external issues confronting the organization.

Martha J. Watson:
It’ll take longer to get where the organization needs to go, and HR will be perceived as a barrier, rather than as adding value. HR can’t be a change agent if it doesn’t change itself.

Joan E. Farrell:
People are sensitive to mixed messages. The true believers are few; most will hang back and wait for us to blink. If exceeding customer expectations is what we say we want, but we reward people solely on the basis of machine efficiencies or bottom-line results, it won’t happen. It’s also important to look beyond HR systems to other business systems. If we establish mutual respect and trust as key values but require three signatures for a team leader to buy $50 in supplies, we’re kidding ourselves. Internal control systems are often based on a zero-trust premise. You can revamp these systems to ones of high trust and still have sufficient checks and balances to avoid getting burned.

Walter M. Oliver:
The two most important questions every company must ask are: Why do we need to change? And, what is the value proposition for everyone involved in the change process? Each company must be able to clearly state the need for change to each stakeholder group, including employees, shareowners, neighbors, customers, and if applicable, regulators. By necessity, those answers will be as individual, and specific, as each organization. At Ameritech, we’ve been able to succinctly and clearly articulate the need for change: Competition was coming to our market. The monopoly way of doing business was over. To prosper in this new environment, customers had to become the focus of our business. So what was good for customers was also good for us. And we continually work to help employees understand how and why these needed changes help everyone accomplish their business and personal objectives.

Joan E. Farrell:
What are you prepared to give up, personally and organizationally, to ensure that change sticks? It should be all but one’s personal values and the end vision. You’re an agent of change, and as such, you must do whatever it takes to get it done. The sacred cows may die, even the ones you’ve raised from birth. Making change happen must be more important than pleasing the boss, getting a raise, making friends, having a balanced scheduled, or often, even getting a good night’s sleep.

Stephen R. Covey:
The change process is going to increase the importance of the HR professional’s role in the future. Here’s the reason why: The world is in such a permanent whitewater state of change, that every organization and culture needs something that doesn’t change. The HR professional represents those principles and becomes a source of security which enables people to live with change and to run with it in exciting and profitable ways. But what if you have no one representing that which is unchangeable? What’s going to happen? Then the whole world becomes topsy-turvy, and people start protecting their positions. They start keeping the old industrial forms of structures and systems that are absolutely obsolete in today’s marketplace. And the HR professional then gets caught up in that and then runs scared and gets defensive.

So, the role is going to increase in significance and human resources professionals should feel a tremendous sense of hope. The hopeful thing is that organizations will develop enough principle-centeredness so that they’ll be on the cutting edge of their marketplaces. HR professionals are at the vanguard, ahead of the pack. And that’s what gives not only hope, but also a tremendous sense of adventure. It’s so much fun. Because when you’re anchored to principles inside, you just love being extremely open, flexible and adapting to whatever flows at you.

Two years ago, Rosemead, California-based Southern California Edison (SCE), the nation’s second-largest utility and a subsidiary of Edison International, faced the biggest change in it’s 100-year history: deregulation. The Public Utilities Commission (PUC) announced that it wanted to deregulate electric utility organizations in California, meaning only one thing for SCE: competition.

The problem was that all the company’s human resources programs and systems were appropriate for a monopoly but not for a newly competitive organization. “It basically changes a company in a relatively short period of time—three to four years—from a monopoly franchise to one that has to compete,” explains Dennis Spry, manager of total compensation for SCE. “Well, all our programs were designed for the [old kind of company]—our compensation, benefits, all our HR programs. So we had to change things pretty darn fast.”

While the particulars of deregulation are still being worked out from a governmental perspective, the organization has been hard at work trying to align its business structure and systems to support the new changes. Of particular note is SCE’s new compensation system the company calls the Compensation Integration Program or CIP, which was rolled out organizationwide on February 19, 1996. For an organization with a $1 billion a year payroll, compensation was an important area to explore for improvements. “We had to look at our comp program to see what we could do to help it better support the goals that the corporation is striving to achieve,” says Spry.

Although SCE already had a good market-driven, pay-for-performance system in place before it faced the changing business environment (already an atypical comp system for a utility firm), Spry knew the company would need to apply new thinking to how it paid people to change their mindset from a secure organizational stance to one in which every day was a new chance to fail, or to wildly succeed.

Enter the CIP. The CIP, a hybrid of a number of different compensation systems, tossed out the old salary-grade system, with its 3,200 job titles for 9,000 employees (that’s one job title for every three employees) and replaced it with far fewer job titles (170). Approximately 800 of those job titles alone formerly applied to managerial and supervisory positions. Now there’s seven job titles for managers and supervisors. The CIP also increased the corresponding salary bands to correspond with fewer job designations. In some cases, there’s a 250% spread in each band, which allows managers great flexibility in how to pay people.

Just these changes alone helped the organization remove the old us vs. them mentality from workers and helped blur the lines between exempt and nonexempt workers. Not a bad idea in a competitive environment.

Next, the CIP incorporated a brand new gainsharing program for SCE, called results-sharing. The basic idea of results-sharing is that if employees agree to surrender 5% of their base pay to the company upfront, they have a chance to replace it with as much as 10% of their annual pay (or 15% in a few cases) if the organization saves money or makes money during the year.

And employees are expected to help generate those savings or earnings. For example, one group of print-shop workers suggested that instead of having the company pay to launder their smocks, they would take them home and wash them themselves, saving the company lots of money. “It’s little things like that, that employees came up with on their own, that saved us money, not to mention they’re now working smarter and harder,” says Spry.

In 1995, SCE’s results-sharing program generated $96 million in savings. “And we paid out less than $40 million,” says Spry. “So the way I see it, the company’s about 60 million ahead of the game.” While he doesn’t expect the firm will save nearly that amount this year, he says he honestly can’t predict what employees will be able to achieve. Above all, he says: “The one thing it does, if nothing else, is it gets employees focused on what’s important [to the company] and gets them engaged in the process.”

To top off the success of the CIP, it has been nearly 100% accepted from the beginning, the day it was rolled out. Why? Because it was developed with the help of employees. “We used people from the line organization to help us build this,” says Spry. There were more than 70 people involved in designing the CIP from the ground up. “Then we used people from the line to go out and conduct the meetings with their peers to explain this program,” he adds.

What all this employee interaction did was help ensure buy-in from the start—an important consideration any time you change the way you pay people (a topic near and dear to their hearts) and any time you’ve got a business environment that’s changing virtually everything about how and why people work. “That way, it wasn’t [just another] human resources program,” says Spry. “It was a company program.”

Harnessing and directing nuclear power is one of the most powerful processes on earth. It’s also one of the most sophisticated. But harnessing the right talent to work on this process has become increasingly more difficult as new technologies require employees to apply advanced skills and abilities.

For Duke Power Co.’s nuclear businesses (three nuclear stations with seven reactors), taking a new look at workforce planning has made a lot of sense in staffing for the future. “In the past, we’d basically say, ‘I’m short four operators.’ And we’d go to human resources and say, ‘I need some people.’ There really was no planning for the workforce at all other than needing a certain amount of people,” says Mike Tuckman, senior VP of nuclear generation for Duke Power. Now, thanks to the company’s new workforce-planning model, more thought is given to how the business will get the right people when it needs them.

A key reason why the nuclear units needed a better handle on staffing has resulted from the business’s downsizing over the past five years. In addition to downsizing its other businesses, Duke has reduced the number of staff in the nuclear business from 5,800 to 4,350 people since 1991. But when the company tried to transfer some downsized workers from other areas of the company into it’s nuclear operations, it fell upon some interesting problems. For example, while internal applicants were willing to try new career paths, they tended to be mid-lifers who would be retirement age before they could reach supervisory level. The typical term between entry-level and supervisor of nuclear operations is 10 to 19 years—too long to wait for most career-changers.

“Using the workforce-planning model, we did a detailed analysis of the work that needed to be done—its physical and mental requirements with some [other] characteristics we were looking for in supervisors,” says Tuckman. They looked at the demographics of the workforce and projected the loss rate—when people would either retire or leave the organization. “We came to the conclusion that even though the company as a whole was downsizing, we wouldn’t meet our needs by continuing to transfer people in at an entry level within operations,” he adds.

The solution? Rather than continue to hire high-school grads, who typically had filled nonlicensed operator positions in the past, the company decided to recruit and hire technical school graduates or ex-Navy nuclear operators instead. These were people who already had some advanced experience or affinity for nuclear operations. The plan is expected to significantly shorten the training path from nonlicensed operator to licensed senior reactor operator. By the end of 1996, Duke will have hired a total of 45 employees in this way since 1994—being careful to build the workforce with a diverse mix of individuals.

In addition to looking at its nuclear operations through the lens of the new workforce-planning tool, Duke’s management team also has been paying closer attention to management development. “Previously, each site typically promoted from within and there was very little interaction [between staff at the three nuclear sites], or looking at individuals’ management capabilities,” says Tuckman. So, about three years ago, the nuclear units began to change that practice. The senior managers and human resources professionals from each site, along with corporate HR and vice presidents, began to sit down to examine every employee—from two management levels down in the nuclear organization down to entry level. “We wound up categorizing everybody relative to their performance, their potential as well as their development needs,” explains Tuckman. “We made a series of planned moves of people to get them that experience.”

What resulted has been a sharing of talent between sites and a much more aggressive development of high-potential employees over the past three years. “It really has had some good effects in broadening each station’s perspective as well as in developing future managers,” says Tuckman.

An important consideration for a business whose primary competitive advantage, in addition to its advanced technological capabilities, will be its people. “The company has a tremendous amount [of money] invested in capital equipment—pumps, valves, buildings, etc.,” says Tuckman. “But the performance isn’t so much tied to the equipment as it is to the knowledge and expertise of the people who run it. I view it as a strategic advantage.”

There were no pink slips. There were no security guards standing by to make sure employees towed the line. There was no confiscating of company property, keys or badges. There was no escorting of employees out of the building. Although employees were shocked and disappointed to learn the company would be eliminating 575 jobs at Public Service Electric and Gas Co. (PSE&G), based in Newark, New Jersey, for the workers whose jobs were being eliminated, it could have been worse—much worse.

Rather than simply laying people off on the same day as the mid-June announcement in 1993, PSE&G—a regulated utility serving more than 1.9 million electric customers and 1.5 million gas customers in New Jersey—took a more strategic approach to people management. Not wanting to lose the investment it had made in these workers (PSE&G’s average employee tenure is 16 years), the company instead gave them the chance to serve the organization in new ways. Many of them first went into a temporary worker pool, then became redeployees who took jobs in other areas of the firm.

As yet another corporate entity facing deregulation of the utility industry, PSE&G wanted to restructure before it faced big problems. “We weren’t waiting until we were completely in a crisis to see where we could trim some staff,” explains Carol Marcelli-Cioban, PSE&G’s career-development manager. “What we did was trim staff in preparation for deregulation and competition.”

A benchmarking of other utilities pointed to areas within PSE&G that could be streamlined. The analysis even suggested that the firm’s human resources organization—in addition to other jobs in the company—needed trimming. PSE&G not only looked outside for help about what work to cut, it also used internal task forces to find answers.

Task-force teams (of four to eight employees each) examined every job within the organization. They dissected thousands of work processes to find inefficiencies and duplication, and gave recommendations to senior managers about what work was superfluous. Senior managers then determined some positions—that once were highly valued—no longer carried the same weight they once did. It was time for cuts—but not at the expense of people’s dignity or welfare. A wholesale downsizing, managers reasoned, wasn’t the solution to rectifying their problems. They committed to redeploying workers into the restructured firm.

Moving people into a transition mode.
As soon as possible after the announcement, managers met with employees (called associates) to let them know their status. Those associates whose jobs were eliminated were encouraged to apply for other jobs in the company—often entirely different jobs than people previously had before. They were given until November 30 (six months from notification) to find a new job or be separated from the firm.

A redeployment task team, made up of five professionals from human resources, had already decided on a plan. With the advice of Scottsdale, Arizona-based Marshall-Qualtec Group Inc. (a firm specializing in organizational change), the task team helped transition workers from their old jobs to new ones, or on to other jobs outside the firm. “We had looked at the traditional outplacement [process], and said, ‘Maybe there’s a better way to get at this,'” says Marcelli-Cioban. “What we did was develop an inplacement process.”

Unique to PSE&G’s transition process was the fact that it used 47 people (from the firm’s total population of 11,000) inside the company to serve as transition counselors—volunteers from all levels of the organization such as engineers, line people, secretaries and general managers. “We really thought our associates would feel better [talking] with somebody from the company,” says Marcelli-Cioban. “Nobody knows the lay of the land and internal politics like an in-house person.”

Counselors had to be people who had good interpersonal communication skills, who could empathize with people in difficult situations and who were relatively stable in their own personal and professional affairs. Counselors spent an average of 16 hours a week over the course of six months helping transition co-workers. “The counselors really helped people evaluate their skills and abilities, helped them to present themselves for jobs, to put their best foot forward and most of all, helped them manage their emotions when they were down in the dumps or angry,” says Marcelli-Cioban.

But workers also had access to resume-preparation training and interview-skills training at a career center located at the company’s headquarters, where they could meet with traditional outplacement counselors from Lee Hecht Harrison, an outplacement firm based in New York City. “And, [employees] were provided with assessment which let them know what their strengths and weaknesses were,” says Peter Mellett, vice president human resources for PSE&G and head of the transition team that got employees thinking about their options and deciding what to do next.

Using various self-assessment tools, employees determined where their skills, interests and abilities laid. They also pinpointed where new skills and competencies could make them more employable and more valuable to a hiring manager.

In addition, workers had access to a retraining program developed by the firm’s training and development department. The curriculum included:

• A menu of basic in-house retraining courses in areas such as computer skills or business management
• A selection of training opportunities to improve math or writing skills
• Pre-assessment for bargaining-unit and first-line supervisor candidates to help them gauge whether they had the skills to pass qualifying exams
• A waiver of tuition expenses for courses identified as necessary to help the employee achieve competency in a specific area before he or she filled an open position—reimbursed for as long as one year after taking a job.

“We did more than most companies that have undertaken similar efforts to support people in getting the skills and competencies they need to succeed in a new position,” explained Rick O’Leary, the former manager of corporate training and development, as quoted in a company newsletter during the transition phase. To help boost hiring managers’ commitment to hiring the redeployees, PSE&G made a rule that if an applicant had 75% of the competencies needed for a job, he or she should be considered a strong candidate. “Our goal was to have [redeployees] be among the best prepared for a job even if they started a new position with only 75% of the competencies,” O’Leary said.

He added: “As people began to examine their abilities and interests, they [often found] that there were 10 jobs they might qualify for if they brushed up on their skills in a couple of areas.”

Workers became short-term “temps” while looking for other jobs.
“We provided workers with what we call a transition [job], in which they were given 90 days to look internally for another position,” explains Mellett. Many employees went into this transition mode right away. Others hopped from job to job, as the company needed them to do so and as their job-searching progressed.

Robert B. Marshall, president of the Marshall-Qualtec Group explains why putting employees into temporary jobs is such a good idea: “Allowing people to participate as fully as they can in the process is a much better solution to just going up to people and saying, ‘You’re outta here.'”

People need something to do while they’re exploring other options. He says that many companies, when they’ve just restructured and cut jobs, simply take people off their old jobs and just send them off to a career center where they’re 100% occupied with a job search. “The best way [for people] to find a job within a company is to stay productive, so while they’re in transition, they’re assigned a job,” Marshall explains. People get time out for career seminars and job-search activities, but they have a job in the meantime.

It’s hard for some companies to do this, Marshall explains. The reason? “Company executives are overwhelmed that they have more people than jobs. The key to this approach is the leadership of the organization in recognizing they must manage this process of redeployment transition as carefully as they manage any other aspect of their business—which they’re usually not willing to do,” says Marshall. “Usually executives have no patience, no tolerance and no stomach for this, so their solution is just to let people go. Or, they send them across the street so they don’t have to look at them every day.”

Putting workers into a temporary pool was a good idea, but there was also a down side. “One thing you have to be careful about is putting in place a nomadic group of temporary people who go from temp job to temp job, because then you just move the workforce around and not necessarily put them in places where they optimize their potential,” says Mellett. He also warns that it isn’t good to keep workers on temp status too long because it might delay managers in making hiring decisions necessary in a competitive environment.

Managers were asked to hold up on posting new jobs for a month after the announcement while employees got settled with the reality of losing their old jobs and taking interim temp jobs. “Before these postings [were released] to the general population, the people who were in jeopardy had first crack at them,” says Marcelli-Cioban. “It would have created a lot of ill-will otherwise.”

If a redeployee applied for another job, and got a job offer, he or she had 72 hours to accept it. If the employee rejected the job, separation from the company was mandatory. Many employees who took new jobs in the company said the decision provided them with the chance to stay with the company, gain new skills and perhaps then move on to a different position.

By November 30, 445 of the original 575 employees (77%) found other jobs in the organization and 100 more decided to retire. Only 30 people couldn’t find suitable jobs. Although most associates who stayed made lateral moves, some took lower positions. “And we protected their pay rate,” says Mellett. “So if they went for a lower-paying job, we didn’t reduce their base pay.” This even applied during the temp phase. “They may not have gotten any raises for awhile,” added Mellett, “but their pay was never reduced.” Employees who couldn’t find jobs in the firm received financial support from the organization for up to six months while they looked elsewhere.

The HR department ran a survey of the employees who took other jobs in the firm. “Most of them said [the redeployment process] was a really strong wake-up call,” Marcelli-Cioban reports. Some said the change in jobs was actually the best thing that ever happened to them. And managers said they were generally satisfied with the workers’ abilities in their new jobs. “So it was really a win-win,” she adds.

Since this first wave of reorganization, PSE&G has had to reorganize and cut more jobs, but has continued to run the transition center for the past three years to help redeploy workers into other jobs. “I think most people in this company have come to the conclusion that their destiny is in their hands and that the company will do a lot for them to help and support them through whatever career growth or career transition they’re experiencing. But ultimately, it’s up to them,” says Marcelli-Cioban. “Many people up to now haven’t updated a resume in 25 years. I think most people now have one. I think the culture has changed—I really do.” It has been a struggle for an organization whose culture has gone from paternalistic to entrepreneurialistic.

But it has made the transition in a humanistic way. “If you hire people one at a time, you better let them go one at a time,” says Marshall. Your reputation, and possibly your business, may depend on it.

There’s a trend on the horizon so new you probably haven’t heard about it yet. But you will. Believe it or not, there are some people who actually aren’t worried about losing their jobs. In fact, some of them aren’t particularly worried about having jobs, lots of money or even having ties to the civilized world. They’re a new breed of workers who are neither mommy-trackers, daddy-trackers nor fast-trackers. They’re called downshifters. And they want to slow down at work, so they can upshift in other areas of their lives.

It’s not the same old workers just trying to juggle an increasingly heavier load—it’s actually a group of people who want to bring the whole race at work down to a slower speed, so they don’t have to “get a life.” They can enjoy the ones they already have—at home and in the community.

For human resources professionals, downshifting can be interpreted as the next level beyond work-life balancing. It requires that companies be even more creative in their concept of what jobs are—and the time it takes to do them—and what it means to integrate business needs with employee motivation, talent and the pursuit of happiness.

And here’s the kicker: You may have actually helped to create this particular breed of shuffle-footed workers. Over the past several years, as Corporate America has downsized, reorganized and reshuffled itself into oblivion, it has told employees: Here are all these nice work-family benefits you can take advantage of to balance your life.

On the other hand, we’re going to work you so hard that they won’t mean much.

What it boils down to is this: If employees are overworked, they can’t balance the rest of their lives, no matter how many perks we give them. It’s as if we’ve said: We’ll give you a gourmet meal but no time to enjoy it. Talk about dangling a carrot on a stick.

These workers aren’t angry, per se. They don’t want you to figure out the meaning of life (or at least the meaning of their lives). They just don’t fit into the traditional fast-track mold anymore. They’re measuring success by their own standards. And they’re demanding companies be more flexible in how they deal with them—and their greatest asset: their time. It was just a matter of time before these workers started drifting out to sea. It’s going to take a pretty impressive tactical net to reel them back in.

What exactly is this downshifting thing, anyway?
There are two camps of downshifters: those who want to break out of the corporate mold—temporarily or permanently, and those who just want to work less.

Azriela Jaffe is a downshifter. A former human resources director for Lutheran Social Services of New England, Jaffe, 36, recently downshifted from a secure corporate job, to being a work-at-home mom in Lancaster, Pennsylvania. “I always found HR to be a meaningful career to me in parts, but, like any job, I would spend perhaps half my day doing what I loved to do and the other half of my day doing what my job description said I had to do,” says Jaffe. Increasingly, what she found was that she loved the coaching and writing parts of HR, but not everything else that went with it.

And she could never quite get herself in sync with corporate timing. “I’m not somebody who molds well to an organizational schedule” she says. “I found it very difficult to constrict my natural flow, my natural way of being, to an organizational culture—and there was always tension between me and my employers because I got my job done really well, but I found my natural rhythm wasn’t to be sitting in an office for eight hours, five days a week. I really wanted the freedom to be able to work when and where I chose.”

A little more than a year ago, she left to pursue her passions. She founded a coaching and consulting firm that helps individuals reach personal and business success and authored her first book, “Honey, I Want To Start My Own Business, The Essential Guide for Couples on an Entrepreneurial Journey,” which will be published in June.

Susan Truman, 34, another downshifter, left the corporate world in 1990 after having her first baby. At the time, Truman was a senior business administrator at TRW Inc. in a Los Angeles suburb, but wanted to stay home with her baby. So she resigned—and doesn’t plan on returning to another corporate job for several years, if ever. “I quit at a time when the company was cutting back, so people were feeling insecure there anyway,” says Truman. “Many people were glad to leave and move on to something else.”

In addition to now being the mother of two, she’s the president of her former college sorority and coordinates a local chapter of Mother’s International for 109 women at her church. “All of them come from professional careers and have left business,” she says.

And while the company had just started providing child care onsite, it wasn’t enough to make her stay. “I definitely think there are women who would continue working if they were given a more flexible work schedule—like three days a week or something like that,” she says. She and a co-worker tried a job-sharing arrangement, but it didn’t work out. “When you’re at a responsible level, they need somebody there all the time to handle the job.”

When Truman and her husband bought a modest home a few years before their first baby arrived, it was in anticipation of her quitting and their being able to live on one income. It’s one variation on a theme being called “voluntary simplicity” or “simple living.” The Trends Research Institute in Rhinebeck, New York says voluntary simplicity is one of the top trends of the ’90s. Experts say it’s probably the most fundamental shift in lifestyles since the Depression. In some ways, voluntary simplicity somewhat resembles a Depression era lifestyle. These people are living in more modest homes, often driving used cars and sometimes even wearing thrift-store clothing. It’s almost as if they’re taking a vow of poverty. To them, consumerism is a dirty word.

At the core of the movement are values. People are valuing money and possessions less, and valuing time, health and peace of mind more. Regardless of the degree to which people scale back at work, pare down their lifestyles or relax the overall pace of their lives, downshifting is about people separating what they want from what they need to be happy.

“I know some people who actually are saying, ‘I’m not going to work for a Fortune 500. I’m not going to get into that,'” says Andrea Saveri, a research director specializing in workplace issues and technology for the Institute for the Future in Menlo Park, California. “It’s happening for a number of reasons,” says Saveri. “The economy, the kinds of jobs that are being created, what technology allows an organization to do, what technology allows an individual to do and all the burn-out. So you get this weird kind of convergence of factors.”

Part of this trend may be a subtle reaction to modern advances. Humankind has taken two giant steps forward. Downshifters want to take a step back. “Technology can actually be used to help people downshift,” says Saveri. Cell phones, fax machines, pagers and personal computers linked to remote networks certainly give people more options about when and where to work. But technology can, and does, create problems. Because people can work anywhere, they are working everywhere. Worse: They’re expected to work everywhere. The result is that technology itself has increased, rather than decreased, the workload and the expectations. People literally get stuck in the virtual office, from which there’s no respite. People are saying: Stop the world, I want to get off.

A November 1995 poll conducted by U.S. News & World Report found that 48% of Americans have done at least one of the following in the last five years: cut back their hours at work, declined or didn’t seek a promotion, lowered their expectations for what they need out of life, reduced their commitments or moved to a community with a less hectic way of life.

The phenomenon is, in a word, hot. It has been on the covers of magazines such as Working Woman, and has been the subject of talk shows by Oprah and Phil Donahue. Books such as “Your Money or Your Life” by Joe Dominguez and Vicki Robin, a primer on achieving financial independence and considered a handbook of the movement, are selling by the thousands.

And the trend doesn’t seem to be generation-based. Granted, the front-runners of the movement are aging hippies in the Pacific Northwest who never lost their ’60s yen for barefooted pleasures. But currently, a not-so-scary 4% of the country’s 77 million baby boomers—men and women between the ages of 31 and 50—have already started living these simpler lives. A total of 15% of the boomer group (11.5 million people) are expected to join the movement by the year 2000. And no one knows how many others will join in.

But many non-boomers are also finding voluntary simplicity a happier way to live and a scaled back way to work. Companies increasingly are seeing people at various ages and stages of their lives wanting more time than money. “I definitely think people want more time outside of the work environment,” says Vivian Johnston, director of human resources and employee relations for Campbell Soup Company based in Camden, New Jersey, which employs 26,000 workers in the United States and 16,000 more worldwide. “I guess it would depend on what the demographics in your organization look like, but I really haven’t noticed any [particular] age associated with downshifting.” The company has offered various flextime arrangements to employees for years, but has seen people use the time-off programs more in recent years.

And it isn’t just the rank-and-file who are seeking time out of the office. Management guru Tom Peters is taking a sabbatical this year. And Anna Quindlen, the Pulitzer Prize-winning New York Times columnist, left her job a year ago to write books full time at home.

One thing that does seem to separate downshifters from others who are less fortunate is they have embraced their power of choice. While some individuals are perhaps forced into lower-budget lifestyles through matters beyond their control—they’re laid off or can’t find full-time jobs—downshifters have found their voices and are using them to say they’ve had it with the corporate rat race. They don’t need, or want, 80-plus-hours-a-week jobs. They may not even want 40-hour jobs. And they don’t mind giving up big chunks of their paychecks to change their situation either.

They’ve dared to ask the bigger question: Who am I and what’s my life all about? Some are saying: I like my job, but why am I working so hard? Why do I have a big home, fancy cars and high-tech toys but no time to enjoy them? Or, they’re saying: I hate my job. Life’s too short to do what I hate—I’m leaving for greener pastures, or I’m going to work less here so I can have more time for these other interests over there.

Short of helping people find their true meaning in life, companies are forced to conform by giving people the time and flexibility to pursue their interests outside work. And companies are trying to make work as meaningful a pursuit as any other.

Quality of time vs. quantity of time.
The issue at stake is time. Workers want more personal time. But you need them on the job. It’s a struggle to see who’ll win. The struggle is a particularly modern dilemma.

“The American family subsidized Corporate America during the ’50s and ’60s with women staying home and literally doing a lot of unpaid work and allowing a male workforce to work their butts off,” says Saveri. Now, some men and women in the workforce are saying: Why am I working my butt off doing something I don’t enjoy and making more money than I really need?

“Downshifting refers to people shifting out of what you might term a single focus—a corporate focus—and into a more balanced-life focus. That’s not so much downshifting as it is shifting. It’s more of a focusing on what success means to [them], rather than on [how] somebody [else] defines success. I think there’s a lot of people reflecting on that—what will be meaningful success to them—and then trying to work out a life pattern that fits that,” says Eric Lane, director of worldwide staffing for Mountain View, California-based Silicon Graphics Inc., a leading manufacturer of visual computing systems.

With a workforce of 6,300 employees worldwide (4,500 in the United States), Silicon Graphics delivers three-dimensional graphics, color, audio, video and real-time technologies to the technical, scientific and creative computing marketplaces. Founded in 1982, the firm has doubled its revenue in the past two years, from $1 billion to more than $2 billion. With operations worldwide, the company works hard to attract the best people in the industry. Providing an environment in which creative collaboration flourishes is central to its strategy. Its culture is marked by an open communications style that embraces change and encourages risk taking.

“We’re definitely seeing people who are not only interested in their careers, but also are interested in being a whole person—having their family lives, [their work lives] and their community lives,” says Lane. “I personally was elected to a school board here—59 schools, 34,000 kids. I have two daughters who are in the school district, so I’m dealing with that same kind of balance thing myself. And I know a lot of people here at Silicon Graphics who are doing the same thing. They’re involved in their communities. They’ve got a family or a family life. Or they’re taking care of [an aging] parent. And the whole thing about making a meaningful contribution to people around them is an important aspect of who they are,” says Lane.

In fact, a January ’96 article in The Wall St. Journal explains that “Rocky” Rhodes, a co-founder and chief engineer at the firm, has cut back to a part-time schedule—after years of working seven-day weeks. A sticky note on his refrigerator lists his and his wife’s priorities—God, family, exercise and work—and speaks volumes about what downshifting is all about.

Lane says Silicon Graphics gives its managers a lot of flexibility in creating an environment that works for people rather than trying to fit people into a preset mold. “It’s a talent focus,” says Lane. The firm optimizes that talent focus by not having firm policies such as “thou shalt telecommute.” Rather, it allows managers to work with individuals on helping them succeed. Whether that means letting workers shift their schedules so they can pick up their kids from school or working out a job description that makes sense for a woman coming back from maternity leave, so be it. “The key issue in a company like Silicon Graphics is access to great talent. And the flexibility around how to best access that talent is what we give managers a lot of leeway in,” says Lane. “I’m not convinced that a policy is the trigger for that. I think the ability to have an organization with managers who can be trusted is the first step.”

An idea that’s being tossed around in work-life management circles is having employees manage their own time. Throw out timecards. Forget about punching in and out. Simply pay for outcomes, not face time. “Instead of having traditionally structured work schedules, it’s based on output, not so much how much time you spend in an office,” says Madeleine Baker, manager of work-life strategy for Fort Wayne, Indiana-based Lincoln National Corp. So far, Lincoln is just considering the idea along with other forward-thinking companies in the United States. “Until we get the nitty-gritties all fine-tuned, it would be alarming for me to [make the blanket statement] that employees could be hired and then come and go as they please,” she adds. “That would be quite challenging and alarming to managers.”

While there may be constraints—legal and practical—around implementing such an idea, some variation of it may be the wave of the future for certain types of work and certain types of workers. For instance, some clothing manufacturers already allow frontline teams to manage their own time. Employees still need to turn out a certain number of pieces, but how they achieve that number is completely up to them. At the other end of the scale, exempt employees essentially have managed their own time since the concept was created. What’s new is giving employees the flexibility to scale back on all fronts, if they want to, yet meeting the objectives of the company.

A more adult view of employees, work and time.
Downshifting is causing organizations to rethink the very nature of jobs: What’s a full-time job? What’s a part-time job? What’s an as-needed job? What does non-exempt mean? What does exempt mean? Exempt from what? From being asked to work as long and as hard as it takes to get the job done? And who defines when the job’s done? If we aren’t paying by the hour, what are the measurements by which we are paying? These are questions worth considering, because the jobs of the future probably won’t look like the jobs of today. Even companies themselves won’t look the same. Reorganization has seen to that.

Silicon Graphics doesn’t focus much energy on career tracking and career pathing because its industry is moving so fast. “For one thing, many careers [in our industry] didn’t exist a year ago,” says Lane. “So if you wanted to be a Web master three years ago, people would have looked at you like, so what?” Instead of trying to steer people into certain career paths, Silicon Graphics focuses on providing people with flexibility in combining their learning and interests.

People can switch to other departments (or work on projects in other departments) that blend their skills and interests. “For example, if someone was interested in the education market and they were in technology, they could get involved in a product line that was dealing with the education market,” says Lane. It helps them integrate their work with what they think is important in life. People no longer compartmentalize their lives. Now they can combine work they’re passionate about and get a paycheck.

Such an idea follows in the footsteps of the empowerment trend. Take Lincoln National, for example. It allows people to map out their own individual career-development processes, but gives them the tools (training and rotational assignments) with which to accomplish their personal objectives. “It comes down to telling employees: ‘You need to set the course in accomplishing your objectives, and these are the resources we make available to you,'” says Baker.

People just want to be seen as adults, capable of managing their own careers and their own lives. And they want the freedom to manage their work as they see fit. That’s why people are flocking to companies with less stressful, and more open environments like Chicago-based Morningstar Inc., an 11-year-old company that produces 15 publications and products giving data and analysis on various investments. “A lot of people have come to us because of our [more relaxed] lifestyle, growth opportunity and more dynamic atmosphere. People are leaving those bigger, bureaucratic and more stressful [corporate] environments,” says Bevin Desmond, Morningstar’s recruiting coordinator.

Morningstar, which employs 350 workers, also offers a six-week paid sabbatical after people have completed four years of service. “It’s something that was put in place to reward people for the time they spend here, to give them a chance to breathe and perhaps to get perspective on their work and life. We feel like it’s pretty valuable for people to come back from their sabbatical with a new perspective,” says Desmond.

“Part of the nice thing at Morningstar is that there aren’t set office hours [for individuals],” she adds. While the office does have certain core hours, staff members can basically come and go as they see fit. And it tries to make the practice as fair as possible throughout its many departments. Obviously, customer service representatives have to be there to take phone calls during certain hours, but work groups can schedule their own hours within that framework.

“People here work the hours they need to complete their work,” says Desmond. “They don’t feel funny about taking an afternoon off or staying home one day with their child or deciding to take a week off. People don’t get second glances and their commitment to their work isn’t questioned.”

You’ll need to be more flexible than ever.
Corporate America already has made huge concessions toward work-life balancing by providing myriad flex options such as telecommuting, job sharing, part-timing, flextime and sabbaticals. But downshifters are demanding even more innovative solutions to modern life’s dilemmas. And companies are beginning to respond with even more creative ideas.

First Tennessee Bank based in Memphis, Tennessee employs 8,000 workers in 30 states. A year and a half ago it started allowing employees to rearrange work schedules and hours—and even restructure their jobs—based on people’s personal needs. “We’ve really tried to build workplace flexibility into each of our departments and use it not only as a tool to improve employee satisfaction, but also [to improve] customer satisfaction,” says Pat Brown, vice president and manager for First Tennessee’s Family Matters program.

For example, the company cut the number of days the ARP department needed to reconcile customer accounts from 10 to four, as a direct result of flexible scheduling. Following a schedule they helped set, employees now work extended hours early in the month, when the load is heaviest, and take a day off during the slow period at the end of the month. “What they really wanted was time—a day off during the week to take care of everything from running errands to spending time with their children,” says Brown.

The bank also gives workers who’ve been with the firm for at least one year another innovative flex benefit called prime time. People can reduce their hours and still maintain full benefit coverage. They can cut back to 32 hours or even down to 20 (a true part-time job). Most are using the option for six months to two years. “We do have employees starting to take advantage of it,” says Brown. Working mothers particularly like it. They use it to ease back to work after a maternity leave or to work reduced hours while their children are young. But the firm is also seeing older workers use it to transition into retirement—by slowing work hours gradually. And it isn’t just frontline workers—some managers also are looking at cutting back on their hours.

Such flexibility obviously creates staffing challenges for management. What’s important is for employees and their managers and team members to work together to come up with workable schedules for each individual. And the jobs themselves must be scaled back along with the hours. But that can be difficult without the department or company incurring additional expense.

“The area that we’re going to struggle with the most is probably with people with managerial responsibilities,” says Brown. “I would rather reduce someone’s schedule down to 24 hours, versus losing the person totally. That’s the decision you’re having to make. It’s not, can I force them to still work 40-plus hours? We’re doing this because we want to retain folks—that’s very much our focus,” says Brown. “It’s a challenge the firm is ready—and willing—to deal with. This is our fifth year of record profits, so we feel we’re staying profitable even though we’ve been very flexible,” Brown explains. Campbell Soup Company also sees many professional and managerial level workers wanting—and arranging—to work part-time hours instead of full-time. The firm is ready with options when the questions are asked.

Of course there’s more than one way to be flexible. Many companies allow employees to vary their schedules weekly or monthly. Silicon Graphics gives sabbaticals for U.S. workers who want them. Every four years, people can take six weeks off—paid. They can combine the time with vacation time for total leaves of two or three months. Lane says some people prefer to take big chunks of time off, rather than say, coming in three days and being off for four. “So, some of the issues around balance can be intensity of balance,” says Lane. “I think some of the things about what balance means could be cliche and could be a lot different in terms of how people really want to do it.”

Some companies aren’t afraid to let go of workers for as long as it takes. Organizations—like Vancouver City Savings Credit Union (VanCity) in Vancouver, British Columbia—are taking the long view of the benefits of extended leaves. VanCity allows workers to participate in what they call a return-to-work program. Workers can take off for one to three years (unpaid). Since February 1991, approximately 80 people of its 1,100 member workforce have taken time off using this program. About 67 of those workers have been women. Although only a few people took advantage of the program in its first few years, people have participated more in recent years.

“We’re an organization that recognizes that people have to find a balance between work and family, and develop themselves as people,” says Linda Heep, a personnel officer for VanCity, Canada’s largest credit union and a two-time winner of the Financial Post’s “100 Best Companies To Work for in Canada” award. The company sees employees using the program to take time off to care for young children, to go back to school, to travel or to pursue other personal interests. “They need to take that time out without jeopardizing having a position with the company,” she says. Although the company doesn’t guarantee the same position or previous salary to employees who take this extended leave, they are guaranteed a job when they come back. “To us, they’re valuable employees and potentially, they’ll come back as even more valuable because they’ve gone through different types of life experiences,” says Heep.

So that they keep up with technology, policy and product changes, employees must return to work for two, two-week periods each year that they’re out. They can do that on weekends, during the summer or all at once, depending on what works best for them.

Experts say companies need to follow VanCity’s lead and change their concepts of what sabbaticals and leaves of absence are—that down time isn’t necessarily slack time. It’s a time for personal renewal and to take care of the other business of one’s life that can’t be accomplished on weekends only.

Is HR ready for downshifting?
“It’s not so much whether HR’s ready for it. It’s what the business and what managers can support,” says Lane. In some departments, flexibility is limited. Manufacturing plant workers probably can’t telecommute, for instance, because they can’t take their work home or to the beach on laptops. But they might be able to scale their hours back.

“There are functions and certain environments that are more inclined toward certain formats of flexibility. So what we’re looking at is how do you make that equitable in an organization and make individuals feel it’s equitable?” asks Silicon Graphic’s Lane. “That’s something that has to be dealt with as a manager and dealt with within the comfort zone of the team.”

And does the trend concern HR professionals? “It doesn’t concern me, because in a corporation the size of ours, you always have people who are coming in and out of the workforce anyway,” says Campbell Soup’s Johnston. People leave the workforce for short or long periods all the time. “We’ve tried to create an infrastructure that will allow managers to work with the work-life balance [challenge],” says Johnston.

Whether it means people transitioning back from maternity leave by working part-time or people wanting to telecommute because of medical limitations, it’s important to give people options.

Companies must rethink workloads when people work reduced hours. “That’s where we step back and ask ourselves: Will this [reduced schedule] work for the business? Can we work it so that a person can reduce his or her time? And, are there ways we can all work smarter, because it’s not realistic to think that somebody is going to do a full-time job in half the time. So, we do make adjustments as necessary,” says Johnston.

Usually, Campbell managers agree ahead of time on the length of flextime arrangements and reevaluate how well they’re working at six-month intervals. “For instance, in a job-share arrangement in my own department, we’ve agreed that we will review the situation in six months—not only from a business standpoint, but also from the employees’ points of view. Is this really working out the way they thought it would? Are they happy working with a scaled down employment situation? Have their needs changed? Do they need to come back full-time?” asks Johnston. “We’re really flexible—but we have these milestones just to make sure we’re staying on top of keeping a balance for everyone.

“What I would say to other HR professionals is to be open to the [flexibility] concept and give it a try because there are many rewards in it—not just for the employee, but also for the corporation—that aren’t necessarily visible up front,” says Johnston. “So I would just say, ‘Keep an open mind and give it a try where you can. It’s clearly not appropriate in every situation.'”

Where do you draw the line? Lane recommends thinking ahead about what the business needs to accomplish. “If you get away from why you’re in business—from the standpoint of growing the business—and focus too much on the needs only of the individual, then you don’t balance what’s really important [for the business],” he says. If the business folds, then there won’t be any jobs and the issue of whether somebody wants to work 32 hours instead of 40 will be a moot point.

“It’s that delicate balance between the business and what needs to get done to stay competitive and be successful and the people you have behind it to make it all happen,” says Johnston. “If you can balance that creatively, then I don’t see any problem. But if that balance gets tipped one way or the other, then I think we would have to scale back on our creativity.”

Lane says companies probably won’t go out advertising that they’re looking for people to work only 30 hours a week or fewer. And they probably won’t have 30 hours or less as the regular workweek format. But they are needing to be more flexible than ever—especially with those individuals who are highest on the talent chain. Where talent is tight (like in the Silicon Valley) employees essentially drive the process—not the employer. You may need them more than they need you.

Certainly, you can’t keep people working for you if they don’t want to work at all. But if they have chosen to give you some of their precious time, your challenge is to figure out how to keep people from drifting away further. “It goes back to the idea of how do you best create a work environment that allows people to feel the most dedicated, committed and effective that they can feel,” says Lane. Studies show that the more fulfilling you can make the workplace, the more commitment you can get from people, the more likely they are to stay and the more value they’ll feel from the whole relationship.

Money alone isn’t enough anymore. “Now more than ever, [people have a] life-enrichment view of what a job is. [Their job] needs to not take away from [their] development, but actually allow for more complete development,” says Lane. And, you have to be careful about hiring the right people in the first place.

Lane tells the story of Picasso. Picasso loved to paint in a blue room. That’s where he did his best work. “What would happen if a typical corporation hired Picasso, is they’d say, ‘We know you like to paint in a blue room, but we do yellow. You’ll get used to it.’ At Silicon Graphics, we’d say, ‘Well, we don’t have any blue rooms, but how could we get one?’ If you set up an environment that really believes in accommodating the talents and needs of an individual, then that framework gets pretty creative. If you do yellow rooms and you hire blue talent, it doesn’t work as well,” says Lane.

In fact, you’re no longer just competing with other companies for the best talent anymore. You’re competing with campouts, kayaking trips, spiritual awareness seminars, community fundraisers and white sandy beaches. While it may be more challenging for managers, it very well could be a more civilized way to work. And, in the end, an even more civilized way to live.

Pioneers in the new frontier in business—that’s what human resources professionals were compared to at the first-ever Global Business Leadership Through HR conference, presented by Personnel Journal, October 16-18, 1995 in San Francisco. As the leaders and planners of global human resources strategy, HR professionals were alerted to their unique challenges and opportunities as business continues to forge new markets in a world increasingly without borders.

Settlers, sojourners, travelers, visitors. Whether a company is doing business abroad for the first time, or continually seeking new international markets in which to develop, organizations worldwide are having to carefully plan their personnel strategy in uncharted territory. Personnel strategy has become, by far, one of the toughest challenges in doing business globally.

HR leaders from around the world converged at Personnel Journal‘s conference to share problems, information, stories and advice on topics ranging from how to deal with global staffing nightmares, to getting international compensation policies right the first time. They talked about how cultural differences influence how you conduct business. They debated global health-care issues. They discussed worldwide employment-taxation problems. They considered expatriate relocation mistakes. They pondered overseas legal minefields. They shared employee repatriation stories. They commiserated over designing global HRMS systems. They sympathized over assessing performance in a worldwide setting. In a word, they brainstormed. It was a three-day think tank for global HR leadership.

Three themes emerged to guide them into the year 2000 and beyond. Business is becoming more global and HR needs to be at the center of making it happen. Companies need to adapt their practices to other parts of the world, rather than just transplanting American ways. And, finally, HR needs to develop a more complete way to recruit and manage global workers so that individual career paths reflect global expertise and responsibility, and meld from the start with long-term global business strategy. It’s a tough job. But HR professionals can—and must—do it. The future of business depends on it.

No doubt about it: HR must be a leader in global business.
Allan Halcrow, editor-in-chief and publisher of Personnel Journal, opened the conference with a comprehensive overview of the global business community and HR’s role in it. He pointed out that business has become more global, especially for U.S. companies. To date, more than 100,000 U.S. firms are engaged in some type of global venture—with a combined value of more than $1 trillion. And U.S. multinational companies employ almost seven million people outside the United States—people who work in virtually every country in the world.

For example, Colgate-Palmolive operates in 194 countries and receives approximately 70% of its $8 billion in annual revenues from overseas markets. AT&T now has approximately 52,000 employees working overseas in 105 countries. And Bechtel Corp. has more than 30,000 employees working in more than 70 countries.

U.S. multinational companies like these also employ almost 18 million people, representing almost 20% of total U.S. employment. This means one out of every five U.S. workers works for a company with a global presence—and the number is growing by the day.

But globalization isn’t just about U.S. companies expanding overseas. Foreign companies also are setting up operations in America. In fact, foreign multinationals employ three million Americans, representing 10% of the U.S. manufacturing work force. Worldwide, at least 37,000 multinational corporations currently are in business. They control more than 200,000 foreign affiliates and employ more than 73 million people. Information published by the United Nations Conference on Trade and Development states that at the end of 1993, these multinational companies had accumulated assets worth $2.1 trillion dollars.

Economies today know no borders. So, it’s no surprise that half of the executives responding to a recent survey by the American Management Association based in New York City believe the single greatest effect on their business will come from the globalization of markets.

As more and more companies rush to become global, more human resources professionals are being asked to navigate international waters—often without the necessary background. And even with experience, they’re often learning as they go—because one new global business experience rarely resembles another. The rules change by the country, by the company, by the industry and by the day.

Halcrow pointed out that in the next millennium, the caliber of the people in an organization will be the only source of sustainable competitive advantage available to U.S. companies. Every factor of production, other than work force skills, can be duplicated anywhere around the world. It’s all fungible—capital, technology, raw materials and information. The only thing that will distinguish one company from another—indeed one nation from another—will be the quality of its work force. The source of tomorrow’s power will be the product of mind work. Says Chuck Nielson, VP of HR at Dallas- based Texas Instruments and a speaker at the conference: “Only one thing differentiates us—our people.”

How to get that intellectual property—and keep it—becomes an even greater challenge internationally. And it all falls under the responsibility of HR. Even with the change to having more business units—rather than just HR departments—be responsible for staffing and the basics of personnel management, human resources professionals usually must be the first to forge policies and set standards for these practices when they go abroad, or when they bring intellectual capital here from other parts of the world.

When HR isn’t there first, organizations can make huge mistakes in trying to coordinate policies between home and host countries. Just like in the United States, employees in other countries can be overpaid, underpaid or go on strike. They can be undermotivated, misunderstood and misinformed. And if HR makes mistakes, their firms may have to pick up the pieces by renegotiating terms, reorganizing teams internationally or even completely relocating to other cities or countries if the personnel issues haven’t been thought through ahead of time.

From assessing the potential work force in a new country, to deciphering international labor laws, human resources managers often are among the first delegates to have contact with their new foreign partners. Because of this, globalization requires new and higher standards for the selection, training and motivation of people. Organizations are starting to shop globally for talent. So the practices designed to retain good employees also require great scrutiny. The difference between success and failure will depend on how well American organizations learn to manage their global work force.

HR’s role is to find ways to maintain those strengths and capitalize on them. We must realize that although we have experienced tremendous success on our own continent, the global marketplace is a whole new world. It’s one that requires continuous learning about the big, worldwide picture, as well as focused attention on the details that make a company work.

The U.S. way usually isn’t the only—or the best—way.
Conference attendees were reminded that Americans often use themselves as the focal point for how the world—and particularly business—works. When doing business in other lands, Corporate America has tried to simply transport U.S.-based HR policies and practices overseas.

Now, HR professionals are universally chanting the following mantra: “HR policies from the United States don’t always work elsewhere. HR policies from the United States don’t always work elsewhere. HR policies from the United States don’t always work elsewhere.” Global human resources managers have learned, through much trial and error, that their companies need to adapt their practices to other parts of the world rather than just transplant American ways. As business moves into other countries, we realize we can’t use our own egocentric way of looking at people, cultures or employment practices. In fact, our experience with a U.S. work force often gives few clues about how to work with employees internationally. HR managers realize they must start with what’s typical in the host country and design policy from there—whether it’s compensation, benefits, relocation expense reimbursement or any global employment practice. Just as circles ripple outward when a stone is dropped into a pond, HR policies must first take local practices into consideration, then bounce them off what’s possible and practical from the host company perspective.

Shirley Gaufin, VP and manager of worldwide human resources for San Francisco-based Bechtel Group Inc., has solid suggestions for what to do when moving business into countries outside the United States. Bechtel, a 100-year-old engineering and construction company with a presence in 70 countries, suggests that it may seem simple, but the first thing you must do is define your global terminology. For example, Bechtel defines an “expatriate (expat)” as any employee relocated from one country to work in another country, rather than defining it as is done traditionally: an American who’s sent abroad. Bechtel defines a “local national” as any employee hired in a country to work in that country.

Furthermore, the organization defines a “U.S. expat” as an employee with U.S. income-tax liability. It designates “international staff” as expats without U.S. income-tax liability. It defines “foreign contract employees” as short-term, expat laborers employed in labor-short areas, such as in Kuwait during the oil fires. And Bechtel doesn’t use the term “TCNs”—meaning “third-country nationals”—because of its negative connotation. In the past, a U.S.-based company might have hired an employee with a Swiss passport to work in Germany. We would have called him or her a third-country national. Now, it’s better to think of ourselves as one global business community employing various people originating in various countries, and moving them globally as needed.

Bechtel has learned a lot on the global frontier. Gaufin’s advice for HR professionals is based on lessons Bechtel has learned the hard way. She suggests you start carefully with a lot of planning. Commit adequate resources. Be culturally sensitive. Know the local labor market. Deploy decision making to the greatest extent possible. And finally, think globally.

Thinking globally isn’t always easy, especially for HR professionals whose companies have little or no experience in international settings. Speaking at the conference, Richard R. Bahner, global strategy director for AT&T Corp.’s Morristown, New Jersey office, said: “It requires a new mindset.” He says human resources managers must go from rulemaker to consultant, from a functional orientation to a business orientation, from a narrow perspective to a broad perspective, from internally focused to customer focused and externally competitive. Overall, HR must go from a reactive stance to a proactive one, and strive to always think outside the box—even though the box in a global business environment is infinitely more complex.

This is exactly the direction the HR department at Levi Strauss & Co. based in San Francisco is taking so that the company is more globally minded in terms of its human resources strategy. Donna Goya, senior vice president, global HR for Levi Strauss, spoke during the conference on how the company’s growing global business has affected its human resources operations. Levi Strauss, which had $6.1 billion in sales in 1994, employs 36,000 workers worldwide, dispersed throughout 53 production facilities and 30 customer-service centers in 46 countries.

Levi Strauss’s HR strategy was reformed recently to further align itself with the company’s aspirations and values, and to help HR become more of a business partner with the firm’s worldwide operations. In fact, says Goya, HR at Levi Strauss has become its own business unit. All staffing and training has moved into its many business units. And HR now is focused on such areas as HR consulting, communications and information services, leadership development, global remuneration and corporate services, such as employee relations.

Although realigning HR is important to being more of a global partner with a company’s businesses, perhaps the most important consideration on the road to going global is to never underestimate the power of culture. Allied-Signal Inc.’s Sally Griffith Egan gave her suggestions at the conference on how to adapt to different cultures when going global. Egan, vice president HR services, Allied-Signal Business Services, says that in operating a business overseas, you must respect the nuances of local business culture, yet strive for commonality within your overall corporate culture. While you may start business operations in other countries, don’t think of the practices you find there as “foreign.” Think of them as simply different from how the United States and other countries do business.

Morristown, New Jersey-based Allied- Signal employs 87,500 workers (26,000 are non-U.S.-based) and has 400 facilities in 40 countries. It operates on the assumption that its worldwide facilities are more similar than different, that intense competition is a global reality, and employees everywhere want dignity, respect and fair treatment. With $12.8 billion in 1994 sales, 38% of which was harvested in foreign markets, it knows whereof it speaks.

U.S. companies impose a huge presence when they go into other countries. In fact, a common theme throughout the conference was that local employees in other countries often have a higher expectation of U.S. corporations than of their own local companies. That means U.S.-based organizations must be careful to educate employees about the company and its policies and practices, and manage expectations. And if HR isn’t at the center of this education process, it should be.

Egan advises that to avoid arrogance and achieve total quality in a global culture you must not simply impose a monolithic U.S. business culture upon a local division in another country. You must blend their culture and morés with yours. And you must acknowledge that learning curves exist—both in the United States and abroad. Just as you wouldn’t expect employees in the United States to simply get it the first time you explain any HR policy to them, don’t expect local nationals to understand it on the first try either.

In the performance-management arena, companies need to develop local systems that make sense for the culture and people involved. Using a U.S. grading system doesn’t automatically work in another country. For example, Laura M. Simeone, international human resources manager at Cisco Systems Inc. based in San Jose, California, says: “The design of performance management systems needs to be flexible enough to be adaptable for the different needs that countries and cultures have of the system.” She adds: “No one size fits all. Flexibility in program design and operation are critical to success.”

For example, Gordon R. Finch, international compensation, benefits and corporate relocation director with Burbank, California-based The Walt Disney Company, says in designing job descriptions for workers in countries outside the United States, you must consider (among other things) whether job descriptions are common and culturally acceptable, if they create special issues (such as literally becoming a type of employment contract), if language is an issue (make sure terminology successfully will translate) and if job descriptions are broader than typically described in the home country. (For more information on Disney’s international compensation strategy, see the end of this article.)

Again, one home-country policy rarely fits all host countries. And that is doubly true, for example, in teaching managers in local operations abroad how to conduct reviews. “Since culture is such a significant variable in managing and appraising employees, global companies need to provide their managers with training in how culture affects the management process, including the performance-management process,” says Simeone. It must make sense for them, and for you.

Allied-Signal’s Egan echoes this advice. “Develop training that’s tailored. Adopt local educational methods and adapt materials—translation alone never is enough.”

Come full circle: Develop HR systems based on long-term business goals.
When jumping into global business territory, it isn’t the time to be short-sighted. Experts in globalization agree that while it’s excruciatingly difficult to know where the business is going to be five years, one year or even six months down the road, you must plan for future personnel needs as early in the process as possible. And you must also plan careers around those business needs as well.

U.S. companies used to think only in terms of moving U.S. expatriates to other countries for short- or long-term assignments to get new businesses off the ground and on their feet. Now, a new strategy has emerged. Don’t send U.S. expats—or any other expatriates for that matter—into new business ventures abroad on long-term assignments if you can help it. Albert Siu, human resources director, education and development for Hong Kong-based AT&T (China) Co. Ltd., said at the conference: “It’s an issue deep in the heart—having local people running companies.”

The long-term goal is to have local managers and employees working to make new businesses in other countries flourish. It’s the least-expensive way, and overall, perhaps the most productive. Although you’ll probably never be completely free from moving employees from one global operation to another (because it helps spread business knowledge around the organization and it helps boost careers), you’ll probably want to think in terms of developing managers in the countries in which your business is located. Don’t just transplant them. Grow them. General Electric calls it “glocalization”—thinking globally and acting locally.

As AT&T’s Bahner said at the conference, “The key to creating a global work force is having the right person, in the right position—regardless of nationality—at the right time.” So, how do you do that? He says the business mission, the human development system, the business infrastructure and the compensation strategies must be inextricably intertwined.

Global experts say when you do need to move people from one country to another, make sure they’re managed in a “circular” way. That means, develop policies and practices that ensure inpatriates and expatriates are an integral part of the globalization process. Prepare individuals ahead of time for global moves. Pay them fairly while they’re on assignment. Make sure their health-care and benefits needs are adequately covered. Prepare them and their families for their new cultural experience. Keep in touch while they’re abroad. Make sure you—and they—know where their next assignment is. Help them when it’s time to repatriate. Learn from their experience abroad. Don’t waste the human resources your company has invested in by losing them to inattention or misplanning.

GE Medical Systems (GEMS), based in Milwaukee, has a comprehensive international career-development and career-management program. More than 50% of GEMS’ sales are outside the United States, and it employs 14,000 people worldwide; 51% of them are non-American. Janet A. Nelson, manager HR for GEMS, describes her organization’s approach to managing global business and global careers: In keeping with its parent company’s strategy of the boundaryless organization, GEMS either runs or has access to (through GE) a global new employee orientation program, an entry-level GE leadership program, a GEMS leadership forum, a global leadership program and GE executive education program. These programs and processes help employees throughout the organization’s operations, which span from Milwaukee to Asia, learn how to think globally in business and manage their careers around it.

In addition, GEMS uses the following HR techniques to give expatriates and repatriates a complete exit and re-entry experience as they move about GEMS’ worldwide operations: a peer mentor program, pre-departure and cross-cultural workshops, ongoing roundtables for expat support, and an expat peer mentor program. GEMS stays in touch with workers coming and going.

It has to. There’s no question—its business depends on it. As GEMS 1993 annual report stated: “You’re either the best at what you do, or you won’t do it for very long.” Companies that don’t address HR issues in a complete way will pay for their mistakes at best, in missed opportunities. At worst, they’ll pay in closed operations. There’s no time, in a 24-hours business-is-open world, for anything less.

If globalization, and your role as an HR professional within it, makes you feel like you’re a sojourner in a new land, you aren’t alone. It means you’re on the right track. If it were easy, it probably wouldn’t be worth the effort. But there’s money to be made in them ‘thar hills, and your company’s going to need the right people and HR strategies to move you into peak profitability. While HR road maps may be hard to come by, finding other trailblazers won’t be difficult. Personnel Journal is committed to bringing them to you in future global HR leadership conferences and in its ongoing coverage of these issues in the pages of Personnel Journal. It may very well be a small world after all. n

According to the yearly survey by the Human Resource Institute at Eckerd College in St. Petersburg, Florida, the top two concerns for 2005 will be the skill level of the work force and managing change. Here are some tips on how to deal with them.

Skill level of the work force.
Just as you can look at a glass as either half full or half empty, you can look at the two biggest human resources concerns of the future as either exciting or terrifying. No matter how you look at it, the year 2005 will bring with it much change. Whether you’re ready to deal with the two biggest issues of tomorrow may depend on how you plan for them today.

HR managers are saying that skill level of the work force will be their top issue in 2005. Will your work force have the right skills in the workplace of tomorrow? “Even as HR professionals make lists of the skills and core competencies their workers need today, they know in their hearts they’re going to be different tomorrow because changes are happening so fast,” says Jay Jamrog, director of research for the Human Resource Institute at Eckerd College.

HR managers are worried that technology is deskilling 75% of the population. “There’s a big concern that the half-life of skills is getting shorter and shorter because technology will replace a lot of people,” says Jamrog. He says the half-life of skills will be between one to three years by 2005. How do you cope? Continuous training. While jobs and skills may become obsolete, it isn’t a good tactic to let people’s skills lapse.

And you may need to do a better job of work-force planning. “I think work-force planning is an area of need in the future—how to manage the work force toward the skills and competencies that are going to be needed to accomplish the strategies that have been designed by the business,” says Bob Lutz, director of HR planning and information systems for White Plains, New York-based Texaco Inc. Sometimes you have to look back to look ahead. Stay on top of it and your business will prosper.

Managing change.
Managing change is the second big topic for 2005. “Of course you have to manage change, but if you’re always picking up the pieces after the change occurs, and just managing it, you’ll always be behind the eight ball,” says Jamrog. The more innovative companies are looking for ways to not only manage change but also to influence and control it to create an organization that’s change-sensitive—as described in Peter M. Senge’s “The Fifth Discipline: The Art & Practice of the Learning Organization.”

That’s the approach Dallas-based Texas Instruments Inc. has taken. “Being able to manage change effectively and quickly is by far the biggest challenge we face from a people point of view,” says Chuck Nielson, vice president human resources. “Our No. 2 challenge is creating an environment in which people love to learn.” Although the company mandates that people must take a minimum of 40 hours of training a year, the harder part is getting them to enjoy it.

The keys will be empowerment and ease of knowledge transference. If you can get employees to take the initiative to learn, you’re halfway there. If you make it easy for them to pick up the knowledge and skills, you’ll likely be home free.

Drew Carey isn’t a human resources professional, but he plays one on TV. In ABC’s new sitcom, “The Drew Carey Show,” Carey is the assistant director of personnel for a Cleveland department store. In the show’s first episode, which aired on September 13, Carey was faced with a delicate dilemma: Should he hire Mimi for a cosmetic sales position?

Mimi, a fat woman with big hair and heavy makeup, wants the job. But it’s all Carey can do to take the woman seriously because of her dramatic style and presence. Before Carey can get a word in edgewise, Mimi has managed to talk herself into a job—making it clear that she has been discriminated against in the past because of her looks and will not be discriminated against in the same way again.

While this overly dramatic situation was portrayed in a comical light, what makes us laugh is there’s a glimmer of truth to the story. At some point in their careers, most human resources professionals have faced a situation in which they were forced to evaluate someone based on his or her looks, not just on qualifications or potential. And they secretly wondered: How fair is it to make snap judgments about people based on their appearance?

If you were behind Carey’s hiring desk, would you have hired someone who didn’t fit a preconceived idea about what the “right person for the job” was supposed to look like? Have you ever made a snap judgment about someone based on his or her looks and later were proved wrong? Just as there never are black-and-white answers to most human relations questions, it’s difficult to determine when a company should evaluate people based on how they look, or whether to maintain appearance policies in the first place. You might be surprised to learn that there are some solid business reasons for mandating appearance—because those standards can lead to a culture that’s uniform and consistent.

But there are other good reasons not to judge people based on appearance factors, such as height, weight and grooming. Looks-based judgments tend to inhibit diversity, can be discriminatory and can lead to legal entanglements. Certainly, how a person looks should never be the sole factor in recruitment, hiring, promotion or compensation, but it sometimes is part of the employment decision-making process. Should it be? And if so, when? You be the judge.

Physical appearance affects economic status.
Lest you think people are judged solely on performance, and not on their looks, consider the following. From infancy, we start making judgments about how people look. Studies consistently show that babies are more attracted to the faces of people who rate higher on the “beautiful” or “handsome” scale than to those who rate lower. They actually will look at a “pretty” face longer, and turn away from a “not-as-pretty” face sooner.

It seems to be an instinct related to the idea of the survival of the fittest. There’s something in the human psyche that feels the more attractive you are, the better you’ll survive in the world. Therefore, if we align ourselves with the better looking of the species, we also may be better off.

Other studies indicate that when people reach their teens, certain physical traits, such as height and weight, already inhibit workers’ social status and earning potential. For example, a study completed in 1994 by David G. Blanchflower, professor of economics at Dartmouth College, and Dr. James D. Sargent, showed that 16-year-old girls who were in the heaviest 10% of the population earned 7.4% less than their non-obese peers. And, the heaviest teens (the top 1%), earned 12% less. Interestingly, women who still were overweight at age 23 earned 6.4% less than their peers who had never been overweight. It seems that they either never catch up because they’re burdened with low self-esteem that continues to affect their performance as time goes on, or employers continually and blatantly discriminate against them.

The study also shows that height was a critical factor in boys’ earnings potential. For each 4-inch increase in height, boys’ earnings rose 2%. Height, however, didn’t statistically affect girls’ wages, nor did weight affect boys’ earnings.

And statistics don’t seem to change as people age. A 1993 study in New England Journal of Medicine shows that the heaviest 3% of women were 20% less likely to be married, had household incomes averaging $6,710 lower than those who weighed less and were 10% more likely to suffer from poverty. To the researchers’ surprise, problems such as asthma, diabetes, deformed legs and impaired vision didn’t have the kind of impact that weight had.

Height, not surprisingly, seemed to affect men’s economic status more than weight. Short men were 10% more likely to be poor and earned about $3,000 less than men a foot taller.

And height and weight aren’t the only perceived appearance problems either. Overall attractiveness also affects individuals’ economic health. According to a study by economists Daniel Hammermesh and Jeff Biddle—who are aligned with the Cambridge, Massachusetts-based National Bureau of Economic Research—more attractive people earn more and less attractive people earn less. “We were trying to find out how big the relationship was between looks and earnings,” says Hammermesh, also a professor of economics at the University of Texas at Austin. “We hoped to see what gender differences there might be.” There were, in fact, subtle differences.

The researchers analyzed ratings from three sets of data (two from the United States and one from Canada), in which interviewers had ranked individuals on a five-point scale (strikingly handsome or beautiful, above average, average, below average, plain or homely). Then, taking credentials, occupation and age into consideration, the researchers found that good-looking men and women make close to 5% more than average-looking individuals. Unattractive people, especially men, get less (as much as 9% less). Some of the U.S. data shows that attractive women got about 3% more pay than average-looking women, and homely women got about 5% less than those with average looks.

Whether an individual is classified as good looking is simply a state of being. As they say, beauty is in the eye of the beholder. But money, as they also say, is in the hands of the employer—and should be distributed based on performance and not physical status.

Balancing the legal scale on the issue of weight.
Of all the personal appearance topics, weight is perhaps the most delicate. Despite America’s preoccupation with slimness, we’re collectively getting fatter (“fat,” by the way, is the politically correct term). The National Center for Health Statistics tells us that in 1980, the average American man was 5 feet 9 inches and weighed 173 pounds. The average woman was 5 feet 4 inches and weighed 144 pounds. A decade later, the average man weighed 180 pounds, and the woman weighed 153. As of 1993, 68% of all Americans were considered overweight, up from 58% a decade earlier, based on Metropolitan Life Insurance tables. If the majority of people technically are “overweight,” who really is the “majority” or “normal?” And what difference does it make in the workplace?

It shouldn’t make any difference, unless the overweight condition causes a person to be unable to perform his or job. The problem is perceptions—and misperceptions.”There are assumptions made that if people are overweight, they can’t control their lives, or they’re sloppy or lazy,” says Anita Rowe, a diversity consultant in Culver City, California. “There’s a whole set of assumptions that may be unconscious around this issue.”

Says Lee Martindale, a size-rights activist who lives in Dallas: “I would rather be judged by my work, not my waistline.” Martindale, who’s also a paraplegic, says she’s constantly discriminated against because of her disability and her weight. “I’ve had employers offer me positions on the condition that I lose 100 pounds. My standard answer is: Fine, I’ll do that if you cut off your left arm. It’s the same kind of self-mutilation.” She explains: “It all boils down to being allowed to contribute based on your talents, not on what you look like.”

In a culture in which we’re bombarded with social cues saying slim is good, and near-anorexic is better, it’s no wonder that much of American society feels woefully inadequate. Yet, we seem to idolize a weight standard that’s often unachievable, unsustainable and idealistic. For some, it’s an unconscious ideal leading to hurtful bigotry at work.

Take the case of John Rossi, who lives in Chula Vista, California. For 10 years, Rossi worked for Phoenix-based Northern Automotive Corp., owner of Kragen Auto Parts. Four years ago, unexpectedly, Rossi was fired by supervisors in the firm’s San Francisco offices—the area where Rossi worked at the time. When Rossi was fired, he weighed 400 pounds. He learned from another manager that his weight played a part in his firing. “He just didn’t like the way I looked,” Rossi said of the regional supervisor he thinks was behind his termination. “He judged me without even meeting me.”

Rossi sued. Supervisors from the firm argued that Rossi was discharged solely for poor performance. Rossi contends he worked his way up from clerk to manager, often doing the job of two people. When he could no longer fit into the company uniform, he consistently wore slacks and a tie. Rossi claims he continually was praised for his work during his tenure.

During Rossi’s trial, Dr. Richard Kamrath of Walnut Creek, California, testified that obesity can be attributed 80% to genetics and only 20% to environment. After only six hours of deliberation, a jury found that Rossi’s weight condition qualified him for coverage under a California law, similar to the federal ADA law, and therefore protected him against discrimination. The California Supreme Court has ruled that under the state law, obesity is a valid disability when it results from a medical condition, rather than a ravenous appetite.

In September, Rossi was awarded $1 million. He will receive $776,739 for emotional distress and $258,913 for lost compensation and benefits. “I hope people are judged on their character and work ethic, not on their appearance,” said Rossi after the verdict. The company hasn’t decided whether to appeal.

The Equal Employment Opportunity Commission (EEOC) has asserted that obesity—particularly “morbid obesity” (the unforgiving medical term meaning one who weighs twice or more the “average”)—should be regarded as a protected disability under federal law. However, neither the Rehabilitation Act of 1973, the ADA, nor the regulations under either statute directly address the question of whether obesity is a disability.

In its first detailed comment on the subject, the EEOC issued a position statement in 1993 in response to the case of a Rhode Island woman who was 5-feet-2-inches tall and weighed 329 pounds. Bonnie Cook had applied for a job with the Rhode Island Department of Mental Health. She was denied employment, and she sued. The court upheld a $100,000 verdict in the case on the basis of the Rehabilition Act.

The EEOC said that morbid obesity “of sufficient duration and with a significant impact on major life activities can constitute a disability…. It is not necessary that a condition be involuntary or immutable to be covered under the federal Rehabilitation Act of 1973 or the Americans with Disabilities Act,” the commission stated. It compared obesity with alcoholism, diabetes, emphysema and heart disease, all of which have been regarded as covered disabilities, although the conditions “may be caused or exacerbated by voluntary conduct.”

Other jurisdictions have issued varying decisions dealing with obesity as a handicap. A leading New York decision declares obesity to be a handicap. A Pennsylvania Commonwealth Court held that morbid obesity may be, but is not per se, a handicap. A Washington court held that it isn’t a handicap when the condition is “within the plaintiff’s control.”

Whether weight is under a person’s control or not, what about individuals who are overweight, but don’t consider themselves disabled because of it? That was the question ultimately posed by Toni Cassista, a 305-pound woman who went job-hunting. In 1987, Cassista applied for a job opening at Community Foods in Santa Cruz, California. The position involved moving 50-pound bags and produce boxes. She wasn’t hired.

Cassista sued, charging that she was denied employment because she was perceived to be physically handicapped by her weight. Store officials testified they were concerned about Cassista’s experience and ability to safely perform the job because of her weight. Cassista said her overweight condition wasn’t caused by a physiological disorder, and she didn’t want to be perceived as disabled.

The state’s supreme court emphasized that its task was limited to determining the boundaries of the state’s Fair Employment and Housing Act, and that it wasn’t free to define “physical handicap” in terms that may be “morally just or socially desirable.” Because the state law requires an individual to prove his or her weight is caused by “a physiological disorder that affects one or more bodily systems and limits the ability to participate in major life activities,” Cassista’s case was dismissed. But the questions remain.

These are questions that the city of Santa Cruz, California, Washington, D.C. and the state of Michigan have decided once and for all. There, you can’t discriminate against people because of their weight, their height or any other physical condition a person may have been born with. Currently, these are the only jurisdictions having laws forbidding discrimination on the basis of weight and other inherent physical conditions, although others are carefully considering them.

Santa Cruz’s city ordinance says: “It is the intent of the city council, in enacting this chapter [9.83.01], to protect and safeguard the right and opportunity of all persons to be free from all forms of arbitrary discrimination, including discrimination based on age, race, color, creed, religion, national origin, ancestry, disability, marital status, gender, sexual orientation, height, weight or physical characteristic… The council’s purpose in enacting this chapter is to promote the public health and welfare of all persons who live and work in Santa Cruz.”

The law further indicates that physical characteristic “shall mean a bodily condition or bodily characteristic which is from birth, accident or disease, or from any natural physical development, or any other event outside the control of that person including physical mannerisms.”

The law also specifies that employers or labor organizations may not “fail to hire, refuse to hire or discharge any individual” because of these reasons, or “discriminate against any individual, with respect to compensation, terms, conditions or privileges of employment, including promotion.”

Although no cases of discrimination have been filed in Santa Cruz on this issue since it was enacted in 1992, plenty have come up in Michigan. James J. Parks, an attorney with the law firm of Gabrian and Parks PC in Bloomfield Hills, Michigan, should know. Parks has represented employees’ interests in 15 weight-related cases over the past few years. “It’s surprising how people still feel free to treat people differently because of weight,” says Parks. “They would never do it with someone’s age because they’re scared to death [to do that]; they’d never do it because of race, because that’s not politically correct, despite bigotry. But nearly everyone feels free to take potshots at fat people. Weight discrimination is the last bastion of discrimination that society permits.”

He says he just helped settle a case for a “significant amount of money” against an employer who failed to take appropriate steps to stop harassment (name-calling and malicious statements) of an overweight employee. “It’s just like the kind of chiding that happens on the playground,” says Parks. “The difference is it can cost employers millions of dollars if they don’t stop it.” That’s money lost in productivity, morale, turnover and lawsuits.

Parks suggests that even if weight discrimination isn’t illegal where you work, you should consider adding weight to your company’s non-discrimination policy. It will help ensure that employees treat each other with respect. “That doesn’t mean nothing bad will happen to you [if you add it to your policy], but it can’t hurt,” he says. “So why not take that extra step?”

Sizing up the height issue.
Just as you should add weight to your policy as something not to discriminate against, it’s also wise to recognize height has a diversity issue. Although height isn’t a factor in discrimination as often as weight, height discrimination does happen. David Brookfield, for example, who’s 4-feet-3-inches, has been told in employment interviews, “You’re going to have trouble. People won’t hire you because of your height.” He says: “That was before the Americans With Disabilities Act [ADA]. Before laws went into effect, people could say those types of things.” Now, he says that although it may be illegal to say such things, some employers clearly still think this way and find reasons not to hire people of short stature.

Brookfield, who’s a district director for The Little People of America in Anaheim, California, has been employed in the entertainment field for the past several years. He says employers shouldn’t discriminate against little people (or “LPs”—the politically correct term) because of their height. Although height isn’t specifically mentioned as a protected category under the ADA, many LPs have non-visible disabilities because of the short stature, such as curvature of the spine or mobility problems, which do give them coverage under the ADA.

Although employers may have to make ADA-type accommodations for some LPs, such as lowering desks and chairs, the accommodations generally are worth the paybacks you get from employing people of short stature, Brookfield says. “I don’t want to say we’re marketing tools, but [we’re] a way for a company to be remembered,” he says. “If a little person makes a presentation, people tend not to forget it.”

Brookfield says employers need to know that small bodies don’t equal small minds. “We’re full-grown adults,” he says. “We have full-grown minds with the ability to think and sort out problems [just like anyone else].”

Ironically, very tall people don’t seem to have the same problem with misperceptions as short people. “As far as I understand, there’s no discrimination against tall people in employment,” says Ray Wottrich, vice president of publicity for Tall Clubs International, in Stafford, Texas. TCI is a social organization for tall people. “There are studies that indicate the taller a person is, the more likely he or she is to hold a better job and advance more rapidly because there’s automatic respect added to somebody when you’re looking up to him or her—everything else being equal.” But, he says, if people are too tall, they can be perceived as “gawky” instead of “statuesque” and may experience discrimination, too.

A legal look at grooming, appearance and dress codes.
Height, obviously, is something a person has no control over. But what about grooming and dressing? Employers should have some rights to regulate these voluntary actions, right? Well, laws governing grooming and appearance are sometimes difficult to interpret, and must be balanced with company standards.

“The general rule is that an employer can regulate how it wishes to have its employees dress and groom, restricted only by general principles of discrimination law,” says James Hall, an attorney with the Los Angeles-based law firm of Barlow & Kobata. As you know, Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against individuals on the basis of race, color, religion, gender or national origin.

In the early days of Title VII, some women challenged employers whose dress codes required them to wear clothing that imposed a greater burden on them than on men. For example, employers who required women to wear uniforms (often revealing or sexually provocative ones), but only required men to wear slacks and shirts, were required to change their policies. And many had to pay lots of money in damages. “So you can’t discriminate on the basis of a protected classification in drafting or enforcing the grooming rule,” adds Hall.

Companies also need to be careful that grooming policies don’t discriminate against people’s religious persuasions without good reason. In July, a New York federal judge ruled that two guards at Sing Sing prison who were Rastafarians could wear dreadlocks, a common sign of followers of that religion. Prison managers argued that the men’s long hair violated the organization’s grooming standards—which prohibited spikes, tails and names shaved into hair—and that their hairstyle also signified the guards were “getting down” with black inmates. The judge disagreed saying there was no proof the hairstyle was unprofessional or posed a threat.

Race is another area that appearance standards, unwittingly or not, must be careful not to discriminate against. In one instance, Ann Arbor, Michigan-based Domino’s Pizza Inc. had a long-standing, nationwide rule against facial hair. The EEOC challenged the rule on behalf of employees saying it racially discriminated against black males who often suffer from pseudofoliculitis barbae, a genetic skin disorder that makes shaving difficult, and even painful.

A 1993 U.S. Court of Appeals for the Eighth Circuit concluded that, in spite of the company’s testimony that as much as 20% of its customers have a negative reaction to delivery men with beards, Domino’s failed to show a substantial business justification for its no-beard policy.

“The existence of a beard doesn’t affect in any manner Domino’s ability to make or deliver pizzas to their customers,” the judge in the case wrote, adding that the company “makes no showing that customers would order less pizza in the absence of a no-beard rule.”

However, the courts don’t favor employees in every situation. It clearly depends upon the job and the organization for whom the work is performed. For example, a federal appeals court rejected a race discrimination suit filed by 12 African-American firefighters in 1993. The firefighters had challenged the city of Atlanta’s policy that male firefighters must be clean-shaven. They said black men were prone to suffering from pseudofoliculitis barbae and that the policy was discriminatory because of race. The Eleventh Circuit affirmed a district court’s grant of summary judgment for the city, dismissing the plaintiffs’ argument that the no-beard rule has an adverse discriminatory impact on blacks. The judge in the case wrote that the city proved its shaving rule was prompted by business necessity—a secure seal is needed between the skin and the respirators firefighters wear to protect them from smoke.

Problems over appearance guidelines sometimes can be purely cosmetic. For example, in 1991, an employee of Houston-based Continental Airlines Inc. refused to comply with the company’s newly released, 45-page appearance code requiring women in customer-contact jobs to wear makeup. Teresa Fischette, one of the airline’s part-time ticket agents in Boston, never wore makeup. When the guidelines were adopted, she didn’t change her practice.

According to newspaper reports, the airline fired her. Of the action, Fischette was quoted as saying, “Where does company prerogative step over the bounds into personal choice?” In a letter she wrote to the company’s president, Hollis Harris, she said: “My decision in this matter comes from a deep conviction that this policy of requiring, rather than encouraging, women to wear makeup and lipstick is not only unnecessary, but discriminatory toward women. The company certainly has a right to have… appearance standards, but… wearing make-up and lipstick should be a personal choice, not grounds for termination.” Eventually, the airline reinstated her, but initially stuck with its new guidelines. Whether the company still maintains its strict policy is unknown. Continental has declined to discuss the issue.

Even Burbank, California-based Walt Disney Co., which has strict appearance and grooming guidelines for its U.S. work force, had trouble implementing the same guidelines in France. According to reports, Disney wanted its 10,000 workers in its Euro Disney SCA unit at Disneyland Paris to sign a 10-page addendum to their employment contract called “The Disney Look.” The look prohibits men from wearing mustaches, regulates the use of perfume and requires women to wear modest hemlines.

Although the company has been challenged by employees about the same policy in the United States and won, French labor-law inspectors complained the contract was so detailed, it should have been approved by the company’s works council before being adopted and implemented. After a former Disneyland Paris executive was fined in the case, the organization implemented a much less stringent dress code in its French operations.

“We think of Americans as being super-independent, but the Europeans absolutely were not going to wear ‘le costume,'” says George Simons, a diversity expert and president of George Simons International, based in Santa Cruz, California. “You’re going to need a business reason to do any of these things. And a business reason needs to be substantiated.”

Even with the potential problems appearance standards may create, Erwin Young, City of Santa Cruz personnel director, argues that employers shouldn’t shy away from them. “Those are issues employers should have the right to control,” says Young. Although the city of Santa Cruz doesn’t have written dress codes for city workers (except those who wear uniforms), Young says employers should be able to maintain appearance codes based on reasonable business necessity. “I mean, if a person is working in a warehouse in the back room, who cares what he or she looks like? But if the person’s in a [high-profile job] and serving the public, that’s different. If a company wants to portray a certain image, it certainly seems reasonable.”

Decide on a consistent corporate image and draft employee appearance standards around it.
Having a clear company image is the base from which experts say employers should draft their appearance standards. Whether your firm wants to portray a casual, trendy, conservative or fun image—or any other profile on the image continuum—you need to decide what it’s going to be, rather than let it happen by chance. If you don’t drive the process, employees certainly will develop an image without you, but it may not be the one you want. While the standard doesn’t have to be written, it should be clearly communicated.

This is the position that Jo Anne Dlott, vice president of HR for the Santa Cruz Seaside Company in Santa Cruz, has taken at her organization. Her company has continued to have the same basic appearance guidelines for the 1,000 employees who work in its parks each year during peak season (June through August) as it always has—even after the city’s strict non-discrimination code went into effect three years ago. Dlott says they continue to update the guidelines each year as needed.

Dlott says the city’s looks law hasn’t adversely impacted her organization’s ability to do business. She testified in city council meetings when the law was up for public hearings. In the law’s earliest version, the ordinance would have prohibited employers from discriminating against individuals based on looks for any reason. In the end, the law narrowed it down to not discriminating against individuals because of height, weight or physical characteristics one is born with.

“The city council was really smart,” says Dlott. “They listened to everybody, including employers. In the end, they said,’Look, anything you’re born with or happens to you by accident and alters your appearance, we can deal with that. But if you tattoo your forehead or pierce your eyebrows or dye your hair purple and pink, we don’t think that’s appropriate [to ask employers to overlook].’

“It’s been very livable for us from an HR standpoint,” adds Dlott, whose organization runs amusement parks in both Santa Cruz and San Diego. “We have a fairly strict personal appearance and dress code. But because we’re in Santa Cruz, which is more relaxed, we’re far less rigid than, say, Disney.” Seaside Company park employees wear uniforms and can’t wear bi-level hair, nose rings or a hair color other than one a person would be born with. “Many of our guests come from fairly conservative Fresno, and we basically want to project an image of friendly, well-groomed folk.”

And the company’s very up-front with its guidelines. “When a person walks in the door and says, ‘I want to work here,’ we hand him or her a fact sheet so the person knows before even filling out an application, what our [appearance] requirements are,” says Dlott.

When violations to the appearance code have occurred, Dlott says it has been up to the offending employees’ supervisors to tell the workers it’s time for a haircut, to remove their earrings or to change whatever the problem is. A conversation usually takes care it. When an employee fails to comply, he or she is terminated.

Image experts say companies that take a strong stance on image tend to do better overall because they have a stronger sense of mission and can communicate that better to their customers. “Even if employers don’t think image is an issue, it should be an issue,” says Susan Morem, an image consultant and president of Premier Presentation Inc. in Minneapolis. “I believe that employees’ image should be tied in with the overall image of a company. If companies go to a lot of trouble designing [the physical space of] an office, thinking about advertising logos and such, but forget about their employees’ [image], then they’re missing the complete cycle that will make it a cohesive image with their customer. It all needs to be congruent.” So, be clear about the standards you expect from applicants and employees.

Don’t be afraid to include image as part of your diversity literature, either. The Seaside Company, as part of its guest-service training program, emphasizes that its guests are a diverse population and should be treated equally. That translates to workers’ diversity as well. “It’s really important to treat everyone the same,” says Dlott. The idea is that everyone is different and should be treated with respect.

Says Simons: “Try to operate beyond the level of what the law requires to what’s going to really work.” Have a vision of diversity that includes personal appearance. Then, communicate how it fits into the organization and include it in diversity training. “You want people understanding why they’re [being asked to look] the way they do and what advantage it is to them and to the organization,” says Simons.

A proactive organization capitalizes on its human resources. “One of the ways we waste resources is by having stereotypical views of other people. We dismiss [people] before we give them a chance to show what they can do and what possibilities they bring to [the company] because they’re different.” Does it really matter that one of your employees wears a nose ring? If you honestly feel that, yes, it does, then you need to substantiate why that is. If it doesn’t matter to the business, but you simply find it distasteful, realize it’s your problem, not the employee’s. Seek to cultivate personal expression and the diverse flavor it brings to an organization.

“The secret is voluntary synergy, not just voluntary compliance,” says Simons. “I’m talking about people building synergy to do what their organization needs to do so they can have a good time, make money and contribute to the world effectively.” Simons recommends you become aware of how personal appearances may create unfairness and damage productivity in your organization, and that you see images as diverse.

As someone once said: “If all the tools in your toolbox look like a hammer, then everything will look like a nail.” The face of diversity is supposed to look different. That’s the beauty of it.

Casual dress has been sweeping the country—and dare we say, the world? However, lack of consistency is one of the biggest problems companies have in implementing casual dress policies. Although dress-down standards are spreading like wildfire, they often cause confusion among employees and may send mixed messages.

To help with some of the confusion around what casual dress means, some employers, such as Southfield, Michigan-based Chrysler Financial, a division of Chrysler, have held fashion shows to help employees understand they don’t mean T-shirts and ripped jeans when they say “casual.” In the process, employers clarify what they really do mean by relaxed dress.

Rockford, Michigan-based Hush Puppies, a division of Wolverine World Wide Inc., is one company that now allows business casual dress Monday through Thursday and “casual-casual” dress on Friday. The firm held a fashion show for employees last year to show what they hoped workers would wear—casual, but not too casual. “We’re an international company and we interface with people around the world,” says Maggi Mercado, vice president, design director for women’s shoes at Hush Puppies. “Therefore, there’s a certain level of decorum and polish that’s required here.” Some clothing items they don’t allow: Sandals without stockings, sneakers, leggings, tights, gym wear, cutoffs and ripped jeans.

J. Randall “Randy” MacDonald, senior vice president of HR and administration for Stamford, Connecticut-based GTE, is another enthusiastic supporter of the new casual dress trend. He explained that when GTE was looking for a corporate vice president, they told their recruiter to inform candidates it’s company policy to dress casually on Fridays. “I’ll tell you that in each case, I came dressed casually the day of the interviews,” says MacDonald. So did the interviewees. “Had those people showed up in a dress or with a tie, it wouldn’t have affected me one way or the other.” He says if people are professional, competent and perform well, that’s what counts.

Across America, employees are complaining that with the new casual dress option, they have to go out and buy new clothes just to fit a new corporate image. They say it’s especially frustrating after having carefully built a formal business wardrobe over the years. And with the trend toward reduced salaries and bonuses, employees have less disposable income with which to purchase these new clothes. So, don’t expect “country-club casual” from a work force who can’t afford to shop at Saks Fifth Avenue or aren’t comfortable wearing a more elite style. It may end up looking like a case of class discrimination in an organization.

“Nobody’s telling [employees here] they have to buy a new wardrobe,” says Mercado. “We show them they don’t have to go out and buy anything.” The firm simply wants to show them a more relaxed way of dressing by pairing their clothing differently. And casual is an option, not a mandate. Employees may still wear their suits if they want to.

It’s important that if your company decides on a casual image, executives should also embrace the practice. If the higher-ups are still dressing up, employees will get the idea that to reach the executive suite, they have to dress up, too, regardless of what the company says its standard is.

And if your company promotes a relaxed image, don’t have a double standard in rating employees down if they dress casually. You actually may be getting more work out of them, regardless of how they look. Some studies show casual dress actually increases productivity and morale. And many companies are finding that to be true.

Others aren’t. “Many of the studies, show wonderful benefits from [casual dress],” says Susan Morem, an image consultant in Minneapolis. “I’m not saying that’s not true.” But what she’s seeing among her clients is that some companies that go from a one-day-a-week casual schedule, to an every day casual schedule, find the overall atmosphere is more relaxed and casual, sometimes leading to lowered standards. She cautions: Just make sure that’s the kind of atmosphere you want.

If a cash-balance pension plan isn’t right for your company, you may want to consider these other variations on the pension theme.

Retirement-bonus plan:
This is a defined-benefit plan that states the amount payable at retirement as a single sum that’s a multiple of pay. Although payable as a lump sum, it must also be offered as an annuity for life.

Pension-equity plan:
This is a defined-benefit plan in which participants receive a credit percentage for each year of service. At retirement, employees receive the product of the accumulated percentage points multiplied by their final pay.

Mobility-bonus plan:
This type of defined-benefit plan is for employers in special circumstances. No individual accounts are kept; however, it functions like a defined-contribution plan because the payment is a single sum rather than an annuity stream.

Target-benefit plan:
A type of defined-contribution vehicle that has many features of a defined-benefit plan. The purpose of this plan is to build an account that will equal a specified or “target” amount at retirement.